The investors and analysts who spoke at UK-Nigeria Banking, Finance and Investment Development conference in London last week said the rebound of the Nigerian stock market which started last year will be sustained throughout this year and beyond. The conference which was organised by BusinessinAfrica Events, attracted Nigerians and Nigerians in the Diaspora and investors and financial analysts from Europe and other parts of the world.
Hartland Peel, managing director of Hartland-Peel Associates said the current bullish run in the Nigerian stock market is a product of strong fundamentals of companies listed on the Nigerian Stock Exchange (NSE), predicting that this trend will continue because the Nigerian macroeconomic environment will remain stable for a long time. He noted that some blue chips like Dangote Cement, Nigerian Breweries, Guinness, Guaranty Trust Bank will continue to drive the market in the right direction because they are delivering return on investment that is second to none in the whole world.
Peel, a capital market analyst with bias for African stock markets, pointedly said that the Nigerian stock market is looking good to reach the $1 trillion capitalisation in the next five years. He said all that needs to be done for this to happen is to make the oil majors, telecom firms and the electricity companies that will emerge following the reform of the power sector to list on the NSE. He said similar steps taken in Brazil and Russia pushed the capitalisation of their stock markets skywards, arguing that the same thing can happen in Nigeria.
Yvonne Ike, chief executive officer of Renaissance Capital West Africa, speaking through a representative, also said that the Nigerian stock market has posted fabulous returns that places it among the best performing stock markets around the world. On the strength of its stellar performance backed by a robust macroeconomy, she said that the market can gross $1 trillion in capitalisation in the next five years.
The projections of the foreign investors was corroborated by Wale Shonibare, managing director of UBA Capital Plc, when he said that the Nigerian stock market will grow exponentially in the years to come because the regulatory authorities have restored confidence in the market through painstaking reforms. He also said that the handsome returns which the market is giving to investors will continue to be a source of growth for the market because it is helping to attract both foreign and local investors to the market.
The projections of the foreign investors and financial analysts seem to be in tune with the ambition of the current leadership of the Nigerian Stock Exchange (NSE). On assumption of office, Oscar Onyema, chief executive of NSE said he would grow the capitalisation of the NSE to $1 trillion. He said he would achieve this by reforming the market and through the introduction of various products that will attract investors to the market.
But the market capitalisation as at the end of trading activity last Friday was just $68 billion, a far cry from the $1 trillion capitalisation being projected. However, this is a tremendous improvement from market capitalisation at the end of last year.