Analysts of the Nigerian Capital Market have projected a strong growth for the stock market in the second half of 2016 following an anticipated ease in economic activities.
The analysts have opined that the market would stabilize with the federal government implementation of the 2016 budget, which would boost liquidity in the system, the introduction of flexibility in the foreign exchange market, financial results among others.
The equities market benchmark index, All Share Index, ASI touched a 3-Year low in January and remained subdued for most of first half of 2016 but closed at 3.3 per cent Year-to-Date (YtD), following the flexible exchange rate policy framework introduced by the Central Bank of Nigeria (CBN).
Analysts at Afrinvest Limited said: “We are quite positive about the second half of the year and beyond given the quantum of reforms that have been introduced over the last six months.”
“The economy is gradually shifting towards a market based system in the allocation of scarce resources given the liberalization of the downstream oil & gas sector and the introduction of flexibility in the foreign exchange market.”
“In addition, the implementation of the 2016 budget, which is meant to reflate the economy and set it on a growth path, is one of the recovery catalysts we envision for H2:2016.”
Also, analysts at Heritage Capital stated that the chief determinant of the market trend in the month of July and beyond remains the expected earnings, half year financial position is expected from listed equities with December year end while full year status/incentives should start rolling in from those with March year end.
