L-R: Mrs Chinyere Joel-Nwokeoma, Chairperson Capital Market Correspondents Association of Nigeria (CAMCAN) and Mallam Kasimu Garba Kurfi, MD/CEO APT Securities & Trust Funds Limited during the CAMCAN review of the capital market in 2019 and the 2020 outlook.
Expert in the Nigerian Capital market, Malam Garba Kurfi, on Wednesday projected that the Nigerian equities market would witness double digit growth in 2020.
Kurfi, the Managing Director, APT Securities and Funds Ltd., stated this at the Capital Market Correpsondents Association of Nigeria (CAMCAN) first quarter forum in Lagos.
“The All-Share Index is likely going to close for the year 2020 in positive and may close in double digits.
“Both technical analysis and fundamental analysis move to the positive direction,” he said.
Kurfi said that the All-Share Idex was expected to close in double digit by the end of 2020 to repeat 2017 performance due to some monetary policies introduced by the Central Bank of Nigeria (CBN).
According to him, the review of Cash Reserve Ratio (CRR) from 22.50 per cent to 27.50 per cent will redirect funds into the stock market.
Kurfi said that the restriction placed by the apex bank in Open Market Operation and Treasury Bills participation, if sustained, would impact positively on the stock market.
According to him, the Export & Import window of foreign exchange policy should be retained to ensure stability.
He said that the market might experience volatility because of the changes in the reporting financial reports as adopted by the Exchange without adequate awareness of the brokers.
On sectors to watch in 2020, Kurfi said that companies that would benefit from VAT exemption like Nestle would likely declare better profit.
He said that building material companies, such as cement companies, were likely to double their turnover due to early implementation of the budget.
Kurfi said that insurance companies were likely to do better because of the recapitalisation, with some engaging in mergers and acquisitions or takeover.
He said that banks would not perform well when compared with previous years, due to reduction in the bank charges, fees and crash of the interest rate.
On NSE demutualisation, he said that the initiative would unlock and reactivate idle capital and boost activities in the nation’s economy.
Kurfi explained that that demutualisation would reactivate idle capital in the market.
He also said that it would change the perspective and drive more growth for the nation’s economy.
“It is a good thing and all of us are going to happy at the end of the day, because it is going to unlock more capital for the market.
“For instance, if I place shares as collateral, I can trade and make money.
“We are very pleased that this is coming after so much delay; this will change the economy’s perspective as well,” Kurfi said.
Reviewing the past year, Kurfi said that the performance of the market on quarterly basis in 2019, was the worst in the last 10 years, with negative returns in all the quarters.
He attributed the performance to the tense nature of the polity in the build up to the 2019 election that dampened investors’ confidence.