Stock market investors have been urged to increase their participation in the market by identifying and patronising stocks of companies with intrinsic value, especially during this dividend season.
The capital market analysts maintained that despite the downturn that pervaded the capital market activities in the past few weeks, investors should leverage the current low prices to expand their portfolio.
The Chief Operating Officer of InvestData Securities Limited, Ambrose Omordion, stressed the need for retail investors to increase their portfolio and take position for future gains.He also advised investors not to panic, but go for equities with intrinsic value, especially during this season when dividend payment is ongoing.
“With more investors taking position in value and dividend paying stocks, alongside bargain hunters, we expect next week’s MPC meeting to give direction of the interest rate as inflation continues to decline, thereby driving further the economic recovery and flow of funds.
“ Also, expect repositioning to continue, while profit taking will reduce on the strength of expected payouts and earnings surprises. However, we would like to reiterate that investors should not panic but go for equities with intrinsic value.
“We advise investors to allow numbers guide their decisions, while repositioning for the year’s trading activities, especially now that stock prices remain volatile amid improving company, economic and market fundamentals.“ It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle, or particular stocks therein to successfully manage your trading and investment risks.
The Head, Research and Strategy of Codros Capital Limited, Christian Orajekwe, in a telephone interview with The Guardian, noted that the downturn witnessed currently in the market was due to profit taking, noting that the fundamentals of listed firms are still good.According to him, the factors that improved market performance last year such as stable foreign exchange, pension funds among others are still in existence in the market.He expressed optimism that the first quarter result would reflect the recovery witnessed so far in the economy, adding that the result would be a catalyst for more investors to access the market.He therefore, urged investors to take position and leverage the low prices for more capital appreciation in a near future.
“Corporate earnings will be in line with growth seen in the economy currently and banks are expected to roll out more positive results. Pension funds and foreign exchange will be more stable and those factors that improved the market last year is expected to grow the market this year.”
Also, the Managing Director of Highcap Securities, Imafidon Adonri, stressed the need for investors to increase their participation in the market and stimulate the market for a sustainable rebound and increased stability.He however, advised investors to identify companies that have potentials of benefitting from new economic policies such as the agro allied firms before buying the stocks.“I advice investors to look at the direction of the Nigerian economy. They should identify firms that can benefit from new policies that can drive the economy. These companies are both large and small companies,” he added.