“For the month of October, the market has been relatively flat, overall, the market has gained about 5.5 per cent and if you look at it across sectors, most sectors have also traded relatively flat but some particular securities in those sectors have done well,” Efe Omoduemuke, Fund Manager Stanbic IBTC told CNBC Africa.
The market is expected to remain flat towards the end of the year as it has already experienced significant gains throughout the year. Thus, Omoduemuke believes it is better to play in the stabilising front of the market.
“Also, I think market participants have focused more on portfolio stabilising as supposed to securities that offer a bit of value and uncertainty,” he said.
Due to this, despite the fact that the banking sector offers the highest value in the market, investors have stayed away from this sector as it also brings with it high volatility.
“From the beginning of the year, what we expected the market to do particularly better than what it did last year and we expected that the banking sector would have done well. Unfortunately we saw the industrial sector leading the market,” he added.
With the industrial market is just a bit below 50 per cent since the beginning of the year, it would have been better to have played within the food and industrial sector as it would have enabled portfolio managers to beat the market.
“If banks come up with results that are better than the consensus estimate, it should attract more investors into the securities. Personally I think if the likes of First bank, Zenith, UBA and Diamond bank come up with results that are better than expectation, then you’ll find more participation in the banking sector,” he explained.