Expert attributes NGX rally to uncertainties in fixed income market

He predicted that the uncertainties were expected to persist till the third quarter (Q3) when fixed income yield would peak.


The Managing Director, ARM Securities Ltd., Mr Rotimi Olubi, has attributed sustained rally on the Nigerian Exchange Ltd (NGX) to heightened uncertainties in the fixed income space.

Olubi disclosed this in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.

He added that positive earnings performance by some quoted companies continued to the current rally in the stock market.

He predicted that the uncertainties were expected to persist till the third quarter (Q3) when fixed income yield would peak.

Olubi said the development would encourage more inflow of funds into the stock market, stressing that the rally would persist.

He noted the stock market was currently thriving due to liquidity flow from the fixed income space.

NAN reports that the NGX All-Share Index recorded a growth of 5.69 per cent in the month of April.

Specifically, the All-Share Index which opened for trading during the period at 46,965.48 rose by 2,673.46 points or 5.69 per cent to close trading on April 29 at 49,638.94.

Also, the market capitalisation which opened for the month at N25.311 trillion inched higher by N1.45 trillion to close at N26.760 trillion on April 29.

However, the NGX All-Share index’s year-to-date (YTD) gain position stood at 16.21 per cent, just as the market capitalisation rose by to N4.02 trillion representing 18.01 per cent growth YTD from the opening value.


On the sectors that would drive the stock market in the coming months, Olubi said that consumer goods, agriculture and oil and gas sectors were likely to be the major drivers.

Speaking on the foreign exchange drivers, he said that multi-listed companies such as Airtel Africa, Seplat Energy and Exchange Traded Funds would drive the stock market rally.

”The recent uptrend in performance in the Nigerian stock market is expected to roll into May, June, and July.

”We expect this to thrive on numerous factors, among which we have uptrend in yields, encouraging earnings performance setting the tone for a nice full year for some tickers in June.

”There will be a probable surge of investment into emerging markets seeing a likelihood of recession among advanced market economies.

”The uncertainty is expected to persist till early Q3 when fixed income yield should peak,” he said.




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