Investment experts at Bancorp Securities Limited, one of investment analysis and consulting firms in Nigeria, have forecasted mixed stocks’ performance in the Nigerian Exchange this last week of 2023 financial year as the market would adjust to positive sentiments of the broader economy.
The experts, in the firm’s ‘Weekly Stock Recommendation Dec 27 – Dec 29, 2023’ circulated to our correspondent on Wednesday, projected that the Nigerian bourse is projected to adjust to sustain the positive sentiments surrounding it.
According to the analysts, the financial services sector is expected to return positive, driving liquidity on the bourse just as the Oil & gas index is expected to return flattish alongside, the industrial goods sector and consumer goods sector, primarily due to profit taking and portfolio rebalancing.
They recalled that Nigeria’s unemployment worsened in Q2 2023, as the National Bureau of Statistics (NBS) revised unemployment computation methodology returned a 4.2% unemployment rate, with the minimum bar set to 1 hour of work and no ceilings on the age brackets.
The analysts noted that these numbers represented the cumulative impact of the 5.9% urban unemployment rate and 2.5% rate in rural areas.
They further noted that a major implication of reducing the standards of gainful employment calculations, would be the risk of labor redundancy in terms of budgetary considerations, and multidimensional growth limitations, which when accumulated would hamper real GDP growth in the domestic economy, whilst increasing labour mobility.
On the general performance of the economy, the investment experts maintained that the economy evidently could be considered to be in a state of stagflation, wherein the inverse relationship between unemployment and inflation is undermined, adding that amid worrisome macroeconomic parameters is an improved current account surplus, amounting to $3.26 billion in Q3 2023.
The firm’s analysts linked the improvement partly to the gains from the bullish run-on crude oil in the international market and Nigeria’s appreciable capacity in expanding production through the period.
They, however, pointed out that the distribution of imports by sector, wherein WIP and finished goods accounted for 85.63% was daunting.
