……As experts advocates cautious trade
Investments in the African equities market is gradually taken a new turn, driven by developments in Kenya, which may have projected shock on investments with crisis trailing re-election of its president,Uhuru Kenyatta.
Nigeria Stock Exchange (NSE), Johannesburg Stock Exchange (JSE) and Nairobi Securities Exchange (NSE) rank tops in the African securities market; and statics have shown that when there is challenge in one country, investors will take flight to safety to the other two countries.
The trend is currently playing out as the Nigerian equities market is positioned to be a safe haven for investors taking flight for safety from Kenya’s investment climate.
For one month period the Nairobi Securities Exchange All Share Index as at the close of trade on Friday 11th August, 2017, recorded 8.42 per cent returns on investment for a period of one month.
The Kenya’s bourse for three months, rewarded investors with 19.88 per cent, while year- to- date (ytd) 23.74 per cent and for one year 14.64 per cent
NSE’s ASI during the same period delivered returns on investments delivered a week’s returns of 2.07 per cent, for a period of one month rewarded investors with 6.56 per cent which falls below what the Nairobi’s market delivered.
The Nigerian Stock Exchange for a three months rewarded investors with 15.34 per cent returns on investment, which also falls below 19.88 per cent offered by the Nairobi Securitas Exchange.
However, the Nigerian Stock Exchange demonstrating long impact of new investments overflowing from uncertainty n Kenya’s investment climate has rewarded investors with 42.14 per cent returns year to date, which ranked over returns from Kenya’s bourse by over 100 per cent at 23.74 per cent ytd.
Meanwhile, experts that spoke to Daily Times Nigeria on possibilities of further growth from shortfalls from Kenya’s equities market said that such would happen when there is projection that the Kenyan political crisis could last longer.
Matthew Ogagawhoria, of Matog Consulting, told Daily Times that Nigeria’s capital market is positioned to reap from political uncertainty in Kenya, where some international investors see signs that could hinder the accomplishment of their investment objectives.
“This is not the first time Kenya is going through political crisis, but here in Nigeria, we also have a situation where the president that is inhibiting us to grow” Ogagawhoria said.
He said that before Kenya’s elections and the resultant post-election crisis, the Nigerian equities has been on the upsurge having suffered long period of decline and underpricing.
“Before the Kenyan crisis, our market has seen the worst crisis as our stocks were highly underpriced. Now the central Bank of Nigeria (CBN) has created investment window for investors to take their money at fixed forex rate which has further advanced interest in our market? He said.
However, Mrs. Nkoli Edoka, CEO OF Cowry Securities Limited, told Daily Times that growth of returns on the NSE was long overdue, but however cautioned investors to seek professional advice before making inroad into the market or some companies.