Analysts Outline Equities Market Drivers in Second Half of 2018

As the Nigerian equities market begins the second half of the year on bearish note, investment and economic analysts have listed five factors that will drive the market in the second half of the year. After the sterling performance of the local bourse in 2017, gaining 42.3 per cent, expectations were high that the rally would continue in 2018. But after a bullish performance in the first quarter of the year, the gains were pared as sustained profit taking pushed the market to close the first half (H1) of the year with a marginal growth of 0.09 per cent.

And as the H2 begins, analysts at Afrinvest West Africa, a Lagos-based research and investment firm, said new listings, budget implementation, elections uncertainties, sustained liquidity in forex exchange (FX) and corporate earnings are factors that would determine the performance of the market in the second half of the year. In a report on the equities market review and outlook obtained by THISDAY, the firm stated that a major and potential driver of market performance in H2 2018, will also be the planned listing of the MTN Nigeria shares on the Nigerian Stock exchange.

“MTN Nigeria, a subsidiary of the South African company MTN Group, is the biggest telecommunications operator in Nigeria. Considering the size of the company, a significant jump is expected in the total market capitalisation of the Nigerian Stock exchange(NSE) and given the pedigree and international recognition of the parent company, significant investor interest is expected to be generated by the stock following its listing.

“Consequently, we believe the listing will further deepen the market as well as turn the spotlight on the local bourse given the expected investor interest from both domestic and foreign investors. Furthermore, we believe the listing of MTN Nigeria on the domestic bourse could potentially encourage other “big companies” in Nigeria