Analysts have said that the equities segment of the Nigerian Stock Exchange still has the potential of ensuring good returns to shareholders.

The analysts said that despite the instability recorded in the market in the second quarter of the year, with a careful choice of investment portfolio, investors could still make significant gains from the market.

According to them, the equities market still holds a lot of promise for long-term investors, who will seek advice from professionals before plunging into the market.

For instance, analysts from Partnership Investment said that already prices of some major stocks had recorded some significant improvement within the last two weeks, adding that there might be increased demand for shares in the next few days.

In their report on Monday, they said, “Bargain hunting activities will alternate with profit taking as some stocks have appreciated significantly in the last few trades to support such action. It is still a buyer’s market as equities with hidden value are avail-able.

“We advise clients to make value stocks the preference as many stocks are still trading below their book value. Investment decision should tally with risk appetite.”

Last Friday, analysts from Vetiva Capital Management Limited, said that increased activities in the equity market was boosted by the rising investor-appetite, which according to them, impacted positively on the prices of major stocks.

They said, “The third quarter of the year kicked off on a bullish note, as buying interest in value counters drove the NSE-ASI forward, as the Index returned 2.37 per cent for the week. More importantly, perhaps reflecting rising investor appetite, is the increased market liquidity as reflected in the appreciable increase in activity level relative to the previous week.

“In the fixed income market, there was heightened interest in the bond market as speculation of a possible dovish stance from the Central Bank of Nigeria’s July Monetary Policy Committee sitting triggered some long position taking by traders, who anticipated demand from the Pension Funds Administrators.

Analysts from Meristem Nigeria Limited, noted that more investors seemed to be attracted to companies in the banking as well as the insurance sectors, adding that activities in these sectors had buoyed the market last week.

They said, “Sentiment appears to be gradually tilting in favour of the market, as buyers dominated the floor with activities in the banking and insurance sector buoying the market. Oil and Gas and Food & Beverages sectors also gained all through except the respective losses posted on Thursday and Monday.

“The bullish week may also have been fuelled by investors taking positions as the market awaits the release of more second quarter results and we anticipate a dominance of the bulls this week as factors that drove the market last week remain relevant and valid.”

Source: Punch/Udeme Ekwere