Stock Market to Benefit From Low Valuations – Experts

Investment experts have said the Nigerian Stock Exchange would benefit from low stock valuations despite the present mixed performance following sell pressure in banking stocks.

The experts hinged their analysis on the usual investors’ search for undervalued yields with strong fundamentals.

The NSE market capitalisation expanded by N14 billion last week but the All Share Index declined by 0.08 percent 25,572.57 basis points, highlighting the mixed performance of the Exchange amid growing economic uncertainties.

The analysts at Cordros Capital, in the review of the week performance, said the bourse could see a positive performance in the long run over compelling valuations while advising investors to exercise cautions when buying given current uncertainties.

They stated: “In the absence of a positive catalyst, and given the still uninspiring macro story, we guide investors to trade cautiously in the short term.

“However, we expect the market might benefit over the longer term on compelling valuations and as investors seek alpha-yielding opportunities in the face of negative real returns in the fixed income market.”

Experts at Afrinvest Securities, another Lagos-based investment banking company, said the new week would see investors taking profit, a situation they said could weigh on the Exchange and plunge stock value.