November 12, 2018/Cordros Report
Activities in the Nigeria equities market since the January bull run have been largely bumpy, as the dual impact of domestic worries, and the reverberating effect of global concerns continue to weigh on the market. In our view, without any meaningful positive trigger, investors may see the lukewarm market performance persist even after the general election, come next year.
Certainly, election period is imminent and the polity is gradually heating up. Nonetheless, we believe they are yet to strongly impact market sentiments thus far this year and will remain so over November and December. Undeniably, election-related risk-off sentiments will be stronger from January 2019, however, we believe that the external events and the domestic macro fundamental issues highlighted above will remain the key drivers of market movement. It is therefore noteworthy that investors reassess the impression that local equities have been held down largely by election risk, thus implying imminent recovery post polls next year.
In our view, barring less hawkish monetary policy rhetoric across developed economies, better global trade talks, and improved economic landscape across emerging economies, most of which are unlikely in the near term, and from which NSEASI will certainly benefit, post-election activities in the local market will follow the historical pattern, and more so, in the absence of market-friendly policy changes/announcements.
