Nigeria: Stock Prices’ Free Fall Widens Investment Opportunities

The Nigerian equity market is offering long-term investors opportunities to invest as most of the stock prices have declined significantly below their opening values, THISDAY’s investigation has revealed.

THISDAY checks showed that the bear run in the stock market, which has depressed the benchmark Nigerian Stock Exchange (NSE) All-Share Index (ASI) by 13.1 per cent so far, has cut the prices of many stocks by over 25 per cent.

The price reduction, according to analysts, is an entry opportunity for investors considering the fact that the price declines are not necessary as a result of weak fundamentals of the stocks.

The stock market has been fluctuating since the beginning of the year following negative reactions by investors to political risks that characterised the general election in the first quarter of the year.

There were expectations that the market would rebound after the successful elections.

However, the delay in the composition of the federal cabinet that will show economic direction of the Buhari administration and those to drive it, has kept the market under the pressure of bears.

Foreign investors are reluctant to take advantage of the low valuations as they appear to be more interested in seeing the economic policy direction of President Muhammadu Buhari in his second term, while domestic investors are also waiting for foreign investors to move first, as usual, before increasing their stakes in the market.

Consequently, all the sectoral indices are in negative, safe for the Premium Index that gained 3.3 per cent year-to-date.

Similarly, most stocks have dipped to their two-year low, thereby offering investors an opportunity to buy the stocks at very attractive prices.

For instance, Okomu Oil Palm Plc is selling 32 per cent below its year’s opening price, while Presco Plc is trading 30.9 per cent lower than its opening price.

Transcorp Plc is selling 44 per cent lower than the price it was at the beginning of the year, while UAC of Nigeria Plc offers 44 per cent discount below its opening price.Guinness Nigeria Plc is 42 price lower, just as International Breweries Plc, Nigerian Breweries Plc and Dangote Sugar Refinery Plc are 60 per cent, 42 per cent and 35 per cent lower respectively.PZ Cussons Nigeria Plc is 50 per cent lower than its opening price, while Ecobank Transnational Incorporated, Fidelity Bank Plc, Jaiz Bank Plc, United Bank for Africa Plc, Unity Bank Plc and Zenith Bank Plc are 48.2 per cent; 26.1 per cent; 23.1 per cent; […]

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