Business
Nigeria stock market surge will continue in 2013
Earnings for the majority of listed firms, including full-year results for banks, are due to be released from this month, and most analysts expect them to show significant growth.
Diamond Bank expects 2012 profit to hit 30 billion naira (US$190 million), the lender said during the release of its nine month results, where it posted 23.2 billion naira (US$146 million) profit, compared with a loss of 16.3 billion naira (US$103 million) in 2011.
The index of Nigeria’s top ten banks has risen 20.5 percent so far this year on earnings expectations.
Adeniyi Falade, managing director at Crusader Sterling Pensions, expects stocks to gain 20 percent overall this year, driven by strong earnings and a naira that has steadied at 157 level against the U.S. dollar, thanks partly to Central Bank intervention, making it more attractive for offshore funds.
“We will have 15 percent allocation in stocks in 2013 compared with 10 percent last year,” Falade said. He said bond yields were close to inflation, so real returns were near zero.
The most liquid 3-year and 5-year sovereign bonds are yielding 10.55 percent and 10.32 percent, respectively, almost touching the latest January inflation figure of 9 percent, Reuters data shows.
Last October, JP Morgan added Nigerian government bonds to its emerging market index, which triggered a sharp fall in bond yields of more than 300 basis points across maturities.
