Researchers at Bancorp Securities Limited on Wednesday predicted that recent fiscal initiatives would this week catalyze the performances of FMCG and Industrial goods constituent stocks, particularly as a sizable measure is earmarked to enhance liquidity on the FX market.
Similarly, they anticipated that the bullish pull on select banking stocks were expected to lever up these stocks as capital raising modules continue to unfold in that sector.
The experts, who made these projections in the firm’s ‘Weekly Stock Recommendation for Jun 19 to Jun 21, 2024’ published today recalled that in a recent report, market shaping news was considerably hawkish as to an anticipated response from the market these include but not limited to inflation dynamics and economic stabilization and World Bank funding.
On inflation dynamics, they recalled that the nation’s headline inflation rate increased to 33.95%, up from 33.69% in April 2024, with the key factors contributing to persistent inflation including money supply increase and minimum wage review.
In addition, the analysts noted that to address economic challenges, Nigeria secured $2.25 billion in funding, comprising the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Programme and the Nigeria Accelerating Resource Mobilization Reforms Program-for-Results, from the World Bank to support economic stabilization and assist vulnerable populations.
The funding terms include a 40-year repayment period with a 10-year moratorium and a nominal interest rate of 1%, which poses minimal strain on the current revenue stream of the country.
On the outlook of the local bourse this week, the experts stated: “From the foregoing, we anticipate these fiscal initiatives to bolster performances of FMCG and Industrial goods constituent stocks, particularly as a sizable measure is earmarked to enhance liquidity on the FX market.
“Likewise, bullish pull on select banking stocks are expected to lever up these stocks as capital raising modules continue to unfold in that sector”, the analysts added.
