Share this:

Like this:

Like Loading...
" />
Published On: Fri, Jul 3rd, 2020

GDP: Nigeria stock market may end 2020 in red – Uwaleke

Share This
Tags

 

Uche Uwaleke, Professor of Finance and Capital Market, says the Nigerian Stock Exchange (NSE) will likely close 2020 in red, based on negative real GDP growth rate projections.
Uwaleke, of the Nasarawa State University, expressed the view in an interview with the News Agency of Nigeria (NAN) on Thursday.
He said that the likely outcome was against the backdrop of negative real GDP growth rate projections by the International Monetary Fund (IMF) and the World Bank occasioned by COVID-19.
“The NSE All-Share Index is most likely to close the year in the red against the backdrop of negative real GDP growth rate projections by the IMF and the World Bank.
“Despite this, I expect to see some bright spots, especially in sectors not severely affected by COVID-19,” Uwaleke said.
He said telecommunication stocks would likely outperform the market because of people’s adaptation in the wake of coronavirus.
Uwaleke said that pharmaceutical stocks and insurance companies’ stocks would offer investors increased returns on their investments.
He cited pharmaceutical stocks such as Niemeth, currently benefitting from government stimulus packages, adding that insurance companies’ stocks are also usually sought after during periods of uncertainty, as insurance uptake rises for many.
“Industrial stocks such as Dangote Cement may not disappoint, especially if the government faithfully implements the Economic Sustainability Plan with a lot of stimulus funds to the housing and construction sectors,” Uwaleke said.
According to him, the global response to the negative impact of COVID-19 and how soon the world economy gets started will have an effect on the performance of the market.
“A lot will depend on the global response to the negative impact of COVID-19 and how soon the world economy gets restarted, since foreign investors constitute a significant part of activities in the stock market.
“Market performance will also depend on the level of both local and foreign investors’ confidence in the economy reflecting the vagaries in the international crude oil market, given that the economy of Nigeria is substantially powered by the oil sector,” he said.

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

%d bloggers like this: