What’s in store for Nigerian markets in the second half?

As the Nigerian equities market grapples with a slow start to the second half of the year, investors are eager to identify potential catalysts that could drive growth and market activity. In a recent interview on CNBC Africa, Muktar Mohammed, an Analyst at Assar Investments, shed light on the outlook for Nigerian markets in the coming months. Mohammed emphasized the importance of key triggers such as the release of second-half year results and the formation of the cabinet. These factors are expected to play a crucial role in shaping market sentiment and activity. Despite concerns about the economy and monetary policy, Mohammed remains optimistic about the performance of certain sectors and companies, particularly in the banking and conglomerate sectors. Here's a closer look at the key points discussed in the interview. First and foremost, Mohammed highlighted the significance of the upcoming release of second-half year results by major players in the market. These results are expected to provide insight into the performance and profitability of key companies, which could potentially serve as a catalyst for market activity. Mohammed pointed out that historically, half-year results for big cap companies in Nigeria have been impressive, leading to positive market sentiment. Additionally, factors such as relatively low inflation rates and stable exchange rates are contributing to a favorable investment climate. Despite challenges in the economy, including concerns about monetary policy and currency stability, Mohammed remains bullish on certain sectors, particularly banking and conglomerates. He singled out companies like Nestle and Dangote as top picks for investment in the second half of the year. Mohammed emphasized the resilience of the market and the potential for growth, even in the face of economic challenges. Regarding monetary policy, Mohammed acknowledged the need for stability and intervention in the foreign exchange market. He highlighted the role of the Central Bank of Nigeria (CBN) in ensuring stability and expressed some concerns about direct intervention by the CBN in specific sectors. Overall, Mohammed's outlook on the economy is cautiously optimistic, citing recent appointments and potential shifts in key economic positions as positive signs. He noted the importance of transparency in the oil sector and the role of key officials in driving economic policies forward. While there are concerns about the economy, Mohammed expressed confidence in the current economic team and its ability to navigate challenges effectively. In conclusion, the outlook for the Nigerian markets in the second half of the year is a mix of challenges and opportunities. While economic uncertainties and policy concerns persist, investors can find pockets of growth and potential in sectors like banking and conglomerates. As market participants await key triggers like second-half year results and cabinet formations, the resilience and adaptability of the Nigerian markets are likely to be put to the test. With a cautious yet optimistic approach, investors can navigate the evolving landscape and capitalize on emerging opportunities in the Nigerian equities market.