Investment analysts at Bancorp Securities Limited, one of Nigeria’s frontline investment research and consulting firms, have projected that as current reforms by the Tinubu administration continued to gather momentum, indications suggest that investments in the Nigerian Exchange (NGX) hold promising outlook as financial and industrial stocks would sustain current momentum till the year ends.
The analysts, in the firm’s ‘Weekly Stock Recommendations: Dec 18-Dec 22’ report sourced by our correspondent on Monday, recalled that the National Bureau of Statistics (NBS) recently reported November 2023 inflation at 28.20%, with food inflation hitting a 12-month high of 32.84% in the period.
According to them, the decline in purchasing power is triggered by hikes in transportation costs, real estate cost spikes, increase in cost of healthcare services, amongst others.
Describing inflation as a focal parameter on the radar of the apex bank on how to manage, particularly with its worrisome growth projectile, printing at 28.20% in the month of November, the analysts pointed out that the Central Bank Governor, Dr. Yemi Cardoso-based oversight mechanisms, had postulated inflation targeting as the modus of reining in the rise in consumer price indexes.
On the firm’s forecast for first quarter of 2024, they anticipated funds injection into the domestic economy through Extensive Capital expenditures in tandem with the proposed 2024 federal government budget and, the modulation of interest rates, as a means of tackling the multidimensional setbacks militating the optimal economic growth, particularly in the area of financing costs for companies.
The Bancorp Securities’ researchers further projected: “Based on the foregoing, the capital market is projected to adjust to this new reality in the final weeks of the calendar year of 2023.
“Issuers that make essential commodities across all sectors on the bourse are expected to attract positive investor sentiments. Financial services sector is expected to sustain liquidity on the bourse, whilst positive sentiments is projected to characterize fundamentally strong industrial goods stocks”, they added.
