THE MARKET SPEAKS…

Amidst elections, inflation, devaluation, oil quota backlash Our capital and investment market editor, MANDY OLIVER, says that Investment in equities serves as a grand savings outlet where one could put aside the funds he/ she may not be needing for a short to mid termed period, with prospects of generating higher value when the funds are eventually needed. But current developments are forcing the market to speak differently… Investment windows in the country point to either fixed income or equities which guarantee different returns. While the fixed income investment guarantees a fixed earn￾ing opportunity, that of equities gives you the discretion to determine what to earn, where precautionary time tested study is carried out on the market, period of in￾vesting, the sector to invest in and among others, the company’s growth trajectory and cyclical nature of price movement of the stock. The Nigerian prevailing investment cli￾mate points to the challenges posed by the forthcoming general elections fixed for February 2022. What happens in a Nigerian equities market every election year? What are the impacts of prevailing inflation, MPR increase and currency devaluation threats to investment opportunities in the Nigerian equities market? In the midst of all these, the equities market as seen through the numbers generated by the NGX Exchange at the close of trade by September 23, 2022, showed promises that irrespective of the in￾vestment headwinds, the market remained upbeat year to date (YTD). Out of the 19 measuring indices of the NGX equities market, eleven of the indices closed upbeat as at the end of trading by September 2022, while only eight indices closed in red. There is the possibility that the degree of growth could be expanded, while also the degree of decline could be expanded, whichever way the pendulum swings, the NGX Equities market points to￾wards likely ending the year in green. Pos￾itive indices so far points to the NGX All￾Share Index (ASI) which closed +14.77 per cent ytd, NGX-Main Board Index +28.46 %, NGX 30 Index + 1.39% and NGX Premium Index +3.55%.Other top advancers so far in in the year are, NGX AFR Div Yield Index + 15.55%, NGX MERI Growth Index + 18.97 %, NGX Consumer Goods Index +2.68%, NGX Oil/Gas Index +47.02%, NGX Lotus II closed + 1.10 % ytd, while NGX Growth Index closed +30.67 per cent, barely three months to end the year and five months be￾fore the election.

Out of the 19 measuring indices of the NGX equities market, eleven of the indices closed upbeat as at the end of trading by September 2022, while only eight indices closed in red

So far, the indices that have seen the red side of investment s at the end of trading on September 23, 2033, are the, NGX CG Index – -6.24% YTD, NGX Banking Index – -5.78%, NGX Insurance Index -12.04%, NGX ASeM Index -1.74 %, NGX-AFR Bank Value -17.06 %, NGX MERI Val￾ue -2.37 %, NGX Industrial Goods Index -20.02% and NGX Sovereign Bond Index that closed at -1.92% YTD. Even as investors may not be celebrating over the winning 11 indices against the oth￾er eight indices that have posted ytd loses, investment experts maintained that even as losses are seen now as minus to growth expectations, it provides ample opportuni￾ties for more investors to buy more at low prices with expectation to sell at higher price in short to mid-term future period. Mrs, Nkoli Edoka Managing Director/ CEO of Cowry Securities Limited made the disclosure recently to our correspondent in an interview, as she called on prospective investors to take advantage of the future earning potentials inherent in the market and stocks with good earnings prospects, by buying when share prices drop. According to her, “the best time to make it in the mar￾ket is now that some people are shying away from the market. Some equity prices have dropped and many others may also decline, so, buying such stocks at relatively low pric￾es, would be beneficial to any investors that invests for a short, mid or long term period. Edoka maintained that the viable market opportunities driven by the election scare, is historical that investor sentiments will always drive market reactions to economic.

and political developments in any country including Nigeria. She said, “While many are seeking refuge outside the country, I prefer to stay here and take advantage of the budding opportunities that we have in the investment circle”. She believes that the equities market is going down, because some people are alleged to be pulling out their stocks, using their money to buy for￾eign exchange and keep. Everybody seems to want to convert their Naira to Dollar and keep it for security’s sake. But a lot of people like me see huge opportunities of earnings in the market, because some stocks are now attractive to buy” She said that the political and econom￾ic uncertainties in the country could have been responsible for the prevailing senti￾ment. “Because the people seem to be con￾fused, the people seem to be blind, there are no road maps. BDCs are the cause of the problem, it is time we separate the profes￾sionals from politicians. Professing the way out, she said “Do your work and get away when the time comes. The politicians in the system are having conflict of interest; all of them seem to be very dirty”. She said that it is for the technocrats to always be appoint￾ed to positions of authority in economic matters against appointment of politicians who will trade the interest of the major￾ity for their pecuniary political interest or ambition. Politics, she said, has become an occupation in the country, as some people prefer to be known and addressed as poli￾ticians, instead of their skill or profession, “This means their work is politics and noth￾ing else. When such people are placed in such sensitive places like the economy, you could imagine how the economic system will end up” She emphasized that, the stock market has potential to enrich investors who jump into the market when many other investors are running away, adding that, ‘’ the 2023 elections in Nigeria and prevailing equi￾ties market depressive mood provide great future earning opportunities to investors who invest in growth stocks listed in the market”’. Meanwhile, investors will be con￾cerned with rising Monetary Policy Rate (MPR) in the country and its impacts in the country’s equity market, at the time the country is passing through another election period when the investment climate is ex￾pectedly dictated by political sentiments and perceptions of the likely outcome of the presidential election, scheduled to hold in February 2023. Historically, such election era, has always ushered in a bearish markets both in the fixed income market and the equities mar￾ket segments, but Professor of Capital Mar￾ket at the Nasarawa State University, Uche Uwaleke, gives insight on ways to swim out of the challenges in the market. Respond￾ing to issues raised, said that the second half (H2) of penultimate election year, is not for risk-averse investors as recent evi￾dence from the stock market supports “a buy-in-Sept-Sell in January strategy, ceteris paribus.” According to Uwaleke, who is also the pioneer President of the Association of Capital Market Academics of Nigeria (AC￾MAN), “during electioneering period, In￾vestors are advised to take a longer term perspective as H2 of pre-election year is a good time to identify and take positions in undervalued stocks especially in dividend aristocrats.” The July forum which drew all the executive members of the association to the national headquarters in Lagos from where they connected other members vir￾tually, was themed: “impact of electioneer￾ing on fixed income and equity markets in Nigeria.” According to the University don, the impact of electioneering on equity and fixed income markets is mostly felt in the second half (H2) of penultimate election year and such pre-election years in Nigeria are characterized by tension and uncer￾tainties ahead of the general elections with adverse consequences for the economy and the equities market in particular. The next six months, according to the financial economist, would be character￾ized by rising inflation rate as the impact of the Central Bank of Nigeria’s (CBN’s) tight monetary policy will be insignificant in taming inflationary pressure.