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Monday, July 15, 2013

Company results, returning investors drove recent gains – Analysts

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Company results, returning investors drove recent gains – Analysts
Jul 15th 2013, 23:00, by omosco

Analysts have attributed the recent gains in the capital market to positive company results, increase in investor confidence and efforts by the management of the Nigerian Stock Exchange and other stakeholders to grow the Exchange.

The major indicators of the exchange appreciated for four consecutive days last week, a momentum which was sustained on Monday and the analysts, who spoke to our correspondent, were optimistic that the trend was also reflective of the outlook for the second quarter of the year.

General Manager, Client Services, Compass Investments and Securities Limited, Mr. Sam Ndata, said the gains were driven by the results companies posted and the return of some investors, who had realized that "things are not as bad as they thought".

He said, "The fact is that Stock Exchange, CIS, and brokers are doing a lot to make sure that the market grows. That is not to say the market is bad and the company are not doing well. If you see the result being posted by companies, they are good."

Despite this, and the recovery made by the Exchange, Ndata explained that there was still a lot of apathy by investors, who have lost money due to the crash witnessed in the market, hence the efforts being made by stakeholders.

The Chief Executive Officer, Maxifund Investments and Securities Limited, Mr. Okechukwu Unegbu, who had a similar view with Ndata, said the market was being driven partly by high portfolio investors.

These investors, he explained, came into the market, drove it up and down, made their profit and came back again.

Stressing that there was nothing unusual about the growth in the market, he said, "The way the market has been going is normal; the growth is not astronomical. If you plot a graph depicting the growth of the market, you will see that it is not a steep graph."

He added, "Another thing is that our local investors are gradually coming back to the market. They are not there yet. But our stockbroking firms are trying to bring them back to where they were."

Concerning the outlook for the second quarter, Unegbu said it was positive.

He said, "I see this quarter as a quarter that will continue to consolidate in terms of the gains made in the market."

Ndata agreed that the second quarter would be better than the first because "all indices that we have seen and all that analysts have done so far are pointing upward".

Unegbu, however, predicted that some of the gains would be lost towards the last quarter of the year. This, he explained, was because some people would want to sell off some of their shares for one celebration or the other.

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