Nigeria stocks remain slow at start of 2017

Nigerian equities have had a slow start to the year, with the NSC down 0.39 percent last week. Analysts suggest that profit-taking was a significant factor driving market movements, as investors seized opportunities to exit and re-enter the market at favorable prices. The trend at the beginning of the year saw gains, particularly in the consumer and banking sectors, prompting many to take advantage of the situation. With UBA announcing a meeting last week, market movements were influenced by such events. Looking ahead, market observers anticipate continued volatility until earnings results provide some stability. The advice for investors is to focus on fundamentally strong equities, especially in the banking sector, where mid-cap banks like FCMB, Sterling Bank, and Fidelity Bank offer attractive prices. Other key players like First Bank, Zenith Bank, Access Bank, UBA, and Fidelity Bank also present opportunities for those with risk appetite. Despite the challenging market conditions, the insurance sector remains an area of interest for short-term investors seeking capital appreciation. However, the lack of attractive dividend payouts in this sector contributes to its volatility, while volume drivers are more evident in the banking sector. Discussions around the delayed listing of MTN in 2018 have raised questions about the conditions set by the telecom giant. Analysts believe that resolving these conditions, especially those related to shareholder ownership, is crucial before MTN can successfully list. Challenges within the Nigerian government and the wider MTN group add complexity to this process. As the Monetary Policy Committee begins its meeting this January, the focus is expected to be on addressing the forex crisis, which continues to pose challenges for the economy. The engagement with the Bureau de Change is seen as a positive step towards stabilizing the forex market. Inflation rates and other economic indicators are likely to influence the MPC's decisions in the coming days, shaping the trajectory of the market in the short term.