Capital market stakeholders have stressed the need for retail investors to leverage on the current low prices of stocks to expand their portfolio and position for post election capital appreciation.
The capital market analysts, who spoke with The Guardian, noted that despite the heightening political tension that has instilled apathy and eroded confidence in the market, investors should increase their portfolio for medium to long-term capital gains.
However, the experts urged investors to identify and patronize banking stocks, noting that the “the banking sector is probably the most attractive at the moment, especially the tier-1 lenders.”
More so, they noted that the banking stocks had driven the stock market over the years, based on the structure of the economy, which is short-term based.
Specifically, the Managing Director of Highcap securities, Imafidon Adonri, said aside the banking stocks, long term investors should increase their holdings in the stocks of manufacturing and production companies.
According to him, the sector has declined ridiculously in past few months and is currently in dire need of correction and appropriate policies to stimulate activities in the industry.
“The banking sector will still remain attractive, but if a new administration comes in and pay attention to the production sector, then investment in the manufacturing sector would become more viable.
“The Central Bank of Nigeria (CBN) has a policy that supported some agricultural sector and that promoted the palm oil sector, companies like Okomu oil and Presco still remain attractive. Agric sector is another good sector to invest in at this time.
Adonri, however, noted that insurance still remains a tough area, because they are still recovering from the damage suffered during the recession.
The Chief Operating Officer of InvestData Securities Limited, Ambrose Omordion, who stressed the need for retail investors to increase their stake in the market, however urged investors to patronise stocks with intrinsic value.
“We advise investors to go for equities with intrinsic value, and allow numbers guide their decisions, while repositioning in any stock, especially now that stock prices remain low in the midst of mixed company numbers, weak economic and market fundamentals.
“Investors should review their positions in line with their investment goals, strength of the company numbers and act as events unfold in the global and domestic environment.”
By Helen Oji
The Guardian Newspaper February 4th, 2019