Analysts advise investors on cautious trading as NGX index breaks 15 years record

By Chioma Obinagwam

Amid the joyous news of the Nigerian Exchange Limited (NGX) where the All Share Index (ASI) broke its 15 years record (since May 2008) by crossing 60,000 mark, analysts at Cordros Research have urged investors to trade cautiously.

Confiance News gathered from the weekly report of Cordros Research at the weekend.

Cordros Research still maintains that investors should invest in fundamentally viable stocks.

“We expect investors to trade cautiously in the week ahead as they anticipate the H1-23 earnings season. Notwithstanding, we reiterate the need for taking positions in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” they advised.

Confiance News recalls that the key measurement indicator, the ASI, closed higher at 60,933.94 basis points (bps), crossing 60,000 bps.

The improvement was buoyed by most bluechip stocks.

Although the gaining streak was sustained in the first trading day of the current week, it dipped on Tuesday, following a decline in ASI, which shaved 1.99 percent to close at 60,714.80.

Reacting to market performance, the Chief Executive Officer (CEO) of NGX limite, Temi Popoola attributes the upbeat of the market to the recent policies of the present administration.

Some of them include the liberalization of the Foreign Exchange (Forex) where the gap between the official rate is narrowed, leading to the near harmonization of the exchange rates.

“So in the past, there has been scarcity of FX and this liberalization policy has started to resolve that. So, we expect that our corporates can run more efficiently which means that they can be more profitable in markets like ours.

“We had a gap between the official rate and the parallel market in the past. This has normalized now and there is increased propensity by foreign investors to bring money into Nigeria and that of course helps the general FX situation. The country is now open to foreign capital and what this does is to transform and improve the economy,” Popoola said.