Some developmental economist and financial experts have asserted the outcome of the forthcoming General Elections, the direction of monetary policy and US-China trade tension as factors that would shape the Nigeria stock market in 2019.
In an expression of an expertise opinion over the stock market performance in 2019 would be shaped by both external and internal factors.
According to Prof. Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, the US Federal Reserve monetary policy stance and the ability of the Organization of Petroleum Exporting Countries (OPEC) and allies to keep oil price high, would shape stock market performance in Nigeria and beyond come 2019.
Uwaleke asserted that political tension and outcome of the general elections in Nigeria, the fate of the 2019 budget and direction of monetary policy are veritable projections in determining the stock market performance.
To ensure improved performance of the nation’s stock market, the finance expert urged the Federal Government to defuse political tension by ensuring free, fair and credible elections.
Nigeria may have no control over the external factors, efforts should be made to defuse political tension, through the conduct of free, fair and credible elections. Adding that effective budget implementation would also help to create the right environment for both domestic and foreign investors.
However, he attributed the dismal performance of the Nigerian stock market in 2018 to increasing yield environment in the US, following gains from the normalization of the interest rate by the US Federal Reserve.
He noted that the second factor that hindered stock market growth, during the period under review, was political tension ahead of next year’s general elections.
In the same vein, Mr. Sola Oni, a Chartered Stockbroker and Chief Executive Officer, Sofunix Investment and Communications, attributed the lackluster performance of the stock market to illiquidity in the system.
He opined that massive share dumping by nervous portfolio investors and their Nigerian counterparts who were apprehensive of likely crisis during the 2019 general elections contributed to the market lull.
According to him, the outcome of the next general elections and ability of the Government to tackle the ongoing economic challenges, especially investment in infrastructure, will shape the stock market in 2019.
Oni further stated that effective management of fiscal and monetary policies and the creation of a sustainable and conducive business environment, among others, were expected to shape activities in the stock market.
The experts uphold that, in spite of the market apprehension, there are investments that thrive during the recession. Hence, investors are advised to take advantage of professional advice from stockbrokers and other investment experts who keep tabs on investment opportunities to patronize the market sphere.
