Investors in the Nigerian capital market have been advised on the need to re-align and diversify their investments to ensure that they make good returns.
This advice was given by market analysts following the back of continuous appreciation recorded in the capital market last year.
Specifically, the market capitalisation of the listed equities gained 37.4 per cent or N2.4tn to close at N8.974tn in 2012, compared to the N6.533tn recorded at the beginning of the year.
Similarly, the NSE All-Share Index rose by 35.4 per cent or 7,348.18 basis points to 28,078.81 points on the last day of the year, up from 20.730.63 points recorded at the beginning of the year.
According to the analysts, it is important that investors do not get carried away by the gains, adding that the inability to properly align their investment portfolios may lead to losses.
Analysts from Meristem Nigeria Limited noted in their report that the predicted outcome for the market in year 2012 followed their earlier prediction.
They added that it was thus important for investors who were seeking value and profit in the market to take advantage of the current state of the market and make wise investments.
They said, “The earnings releases so far suggest that fundamentals are still in favour of the market. Year end results are expected over the coming two months and are expected to positively price the market.
“We, therefore, expect value seeking investors to properly realign their portfolio and take advantage of the pricing of some equities, which are still below their nominal value.â€ÂÂ
The analysts noted that it was likely that the activities in the banking sector would drive increased trend in the market adding that most banks were stabilising after the banking shake-up that occurred some years back.
“We still expect banking stocks to be the major drivers of the market’s performance, and this would be clear in the release of their full year results. Also, other sectors like the consumer goods sectors are also expected to drive activities in the market,†the analysts noted.
On their own part, the analysts from Vetiva Capital Management Limited noted that it was likely that investors’ interest would be boosted by the rolling in of more results from major companies quoted on the NSE.
They explained that the buying momentum recorded in the market in the last quarter of 2012 was likely to continue into the first quarter of 2013, and extend throughout the year, adding that investors should therefore take position in the market.
“The expected release of the full year 2012 results is bound to sustain buying momentum in equities going into the week, especially among the financial services stocks,†they noted.
Source: Punch (written by Udeme Ekwere)
