Nigeria’s equities market down 11.8%: A closer look

The Nigerian equities market has had its fair share of ups and downs over the course of the year, with September proving to be a month of mixed fortunes for investors. Usoro Essien, Head of Research at Vetiva, sheds some light on the market's performance and what to expect in the final trading week of the third quarter. Despite the overall negative year-to-date performance, there are glimpses of positivity in certain sectors, particularly banking. The sector has seen an uptick in activity fueled by positive earnings reports from key players. This has attracted significant interest from investors, both domestic and foreign. However, while some sectors are thriving, others are facing challenges such as the fast-moving consumer goods (FMCG) segment, which reported lackluster half-year results. Nonetheless, there has been a trend of bargain hunting for assets at current levels, especially in blue-chip stocks, with optimism for the economy's growth prospects in 2020. One of the key factors influencing investor decisions is the outlook for stocks with strong fundamentals. While long-term value is a consideration, short to medium-term outlooks are also driving investment decisions. Portfolio realignment is on the horizon as we approach the end of the month and quarter, prompting investors to reassess their positions. The banking sector has been a solid performer, providing stability and returns for investors. On the flip side, some consumer goods companies have faltered. Looking ahead to the final quarter of the year, expectations are mixed. While there may be increased interest from foreign portfolio investors due to global monetary policy conditions easing, profit-taking may temper gains. The dovish stance maintained for most of the year has seen a shift towards fixed income markets, but with the improvement in crude oil prices and potential market interest, there could be opportunities for growth. In terms of specific stock recommendations, Access Bank stands out as a must-have for investors given its solid balance sheet and market position. Additionally, other players such as GT and Zenith banks offer value at current levels. As the market navigates through uncertainties and opportunities, investors will need to balance short-term gains with long-term potential to make informed decisions and maximize returns.