Equity investors have been urged to increase their participation in the market by identifying and favoring stocks of companies with intrinsic value, especially in this dividend season.
Capital market analysts have argued that despite the downturn that has gripped the country’s capital market in recent years, investors need to take advantage of current low stock prices and expand their portfolio for future capital appreciation.
Amid the uncertainties in the global economy and growing insecurity in the country, the domestic stock market, after hitting a rocky low for several years, recorded an upbeat recovery as the All Stock Index (ASI), which measures the performance of listed companies shares crossed the 53,000 mark to hit a 14-year high for the first time since 2008, while market capitalization has risen significantly by 5.4 trillion naira since the start of the ‘year.
InvestData Securities Limited COO Ambrose Omordion highlighted the need for retail investors to grow their portfolios and take positions for future gains.
He also advised investors not to panic but to increase their equity stakes with intrinsic value, especially during this dividend payout season.
According to him, with more income investors taking positions in value and dividend-paying stocks, the continued mixed direction of fixed income market returns and TB rates is expected to continue. support the flow of funds to the stock market
“The country’s soaring inflation is a powerful threat to the fixed income market and investment returns, which should indicate that more funds could flow into the equity sector as investors institutions are balancing their portfolios.
“Furthermore, expect further repositioning while profit taking will decline due to expected payouts and earnings surprises. However, we would like to reiterate that investors should not panic but opt for stocks with intrinsic value, especially in this season where the payment of dividends is in progress.
“We expect bulls to resume a growing stance ahead of Presco’s full-year earnings due to hit the market on Tuesday, and portfolio rotations as market participants assimilate macro data and earnings results. Q1 companies released, before March of the year-end 2022 audited financial statements with dividend announcements to support the new month’s uptrend amid oil price rebound,” he said.
Head of Research, FSL Securities, Victor Chiazor, said the market uptrend, which was triggered by year-end results, dividends and impressive first quarter results of listed companies, will most likely begin. to subside in June.
However, he expressed hope that the half-year result would trigger another round of buying interest, especially for stocks that pay an interim dividend.
Therefore, he urged investors to take a stand and take advantage of low prices for greater capital appreciation in the near future.
Also, the managing director of Highcap Securities, Imafidon Adonri stressed the need for investors to increase their participation in the market and stimulate the market for a sustainable rebound and increased stability.