Stock market performance in 2019: Will it be a tale of two halves?

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Thus far in H1-19, major bourses across Emerging and Frontier markets have witnessed a positive turnaround relative to 2018 and the performance has been largely buoyed by the dovish chorus across global central banks. However, the Nigerian Stock Exchange (NSE) appears missing in action, as a surprise interest rate cut in March, some impressive corporate announcements and a relatively peaceful pre-and post-election period failed to stimulate the market.

The major reason for the relatively lacklustre performance by the NSE can be attributed to lack of foreign interests, most likely as a result of uncertainties around the current administration as regards the team it will employ to implement its policies. There is also the current silence around who the next CBN Governor would be, amid fears of a devaluation. Additionally, inactivity at the primary market segment has continued to make the market less attractive to FPIs.

All the above factors are expected to change in H2-19 amid expectations that President Buhari would announce his ministerial cabinet and the next CBN Governor early H2-19. Also, if recent reports are anything to go by, we expect MTN to list on the Exchange, to end a long drought of inactivity in the IPO market and provide some depth in the equity market. In all, we believe H2-19 is poised with some positive catalysts.