Analysts have predicted that there is likely to be improved activities in the Nigerian capital market activities in the remaining parts of the current year. Specifically, the analysts explained that the second quarter, and indeed the remaining part of 2012 would record bullish activities.
Their prediction was hinged on the extremely low prices of major shares, adding that this might be an attracting factor to some retail investors who might want to re-invest in the market.
They added that this was evident in the way the Nigerian Stock Exchange closed last week, as what had started out as a bearish week ended higher on a positive note.
Analysis of recent transactions in the market showed that last week, a turnover of 5.38 billion shares worth N22.47bn were exchanged by investors in 17,019 deals compared to a total of 930.68 million shares valued at N6.33bn exchanged the preceding week in 17,744 deals.
Thus, the NSE Index, which opened at 21,394.77 points appreciated by 204.80 points or one per cent to close on Friday at 21,599.57.
Similarly, the market capitalisation of the listed equities rose by one per cent or N66bn from N6.830tn at which it opened last week, to N6.895tn at the end of the week.
In their report for the week ended June 28, 2012, analysts at Vetiva Capital Management Limited expressed optimism about the expected second quarter results.
According to them, the declaration of interim dividends by some major companies this quarter would also serve to improve activities in the market.
He said, “We are slightly optimistic on the domestic front as we look forward to strong second quarter results from the financials to be accompanied by interim dividends in select counters. However, we expect this to be accompanied by some volatility and not so buoyant volumes.
“On the fixed income scene, we expect market spotlight to shine on treasury bills, given the lessened duration risk. We also expect trading on bonds to remain subdued. On the currency front, we expect to still see volatility at the inter bank market.”
On their own part, analysts from Meristem Nigeria Limited, noted that despite the strong presence of the bears occasioned by weak sentiments both local and global, the NSE Index ended the half year with a 4.19 per cent growth.
This, according to them, was as a result of the impressive first quarter results, which was further complemented by encouraging dividend declarations.
“We anticipate one more bullish quarter in the second half in line with historical trend after the 4.19 per cent return on the Index. We, therefore, revise our 2012 forecast return on the NSEASI to 8.26 per cent, on the backdrop of macro-drivers and sentiments affecting funds flow into equities,” they stated.