BETTER days have been predicted for Nigerian stock market in 2020.
A capital market operator, Garba Kurfi, made the prediction yesterday while expressing optimism that Nigerian equities would bounce in double digit growths for most part of 2020.
Kurfi’s forecast was contained in a speech he delivered at on-going first quarter forum of Capital Market Correspondents Association of Nigeria (CAMCAN) in Lagos.
According to Kurfi, every barometres of measuring Nigerian stock market is presently on a bounce and the trend will continue for greater part of the year.
“The All-Share Index (ASI) is likely going to close for the year 2020 in positive and may close in double digits. Both technical and fundamental analyses move in positive direction,” he said.
Kurfi said that the All-Share Idex was expected to close in double digit by the end of 2020 to repeat 2017 performance due to some monetary policies introduced by the Central Bank of Nigeria (CBN). This, he said, has links with recent review of Cash Reserve Ratio (CRR) from 22.50 per cent to 27.50 per cent, adding that it will redirect funds into the stock market.
On new CBN restrictions in Open Market Operation and Treasury Bills participation, Kurfi stated that if sustained, it would impact positively on equity trading on the floor of stock market. He however warned that Export & Import window of foreign exchange policy should be retained to ensure stability, if the market might experience weather any volatility with minimum shocks, because of the changes in the reporting financial reports as adopted by the Exchange without adequate awareness of the brokers.
Among sectors to watch in 2020, Kurfi said that companies that would benefit from VAT exemption would likely declare better profits, particularly building and beverages companies whose turnovers may double due to early implementation of the budget.
According to him, insurance companies will likely do better because of recapitalisation where firms will benefit in mergers and acquisitions or takeovers. But he regretted that banks may witness this boom due to reduction in their charges, fees and crash of the interest rate.