Half-year earnings to shape equities market sentiments

The Nigerian equities market is poised for a period of uncertainty as investors eagerly await the outcomes of the upcoming half-year earnings, amidst a backdrop of economic challenges and policy changes. Analysts are closely monitoring the market sentiment in light of the July Monetary Policy Committee meeting and the proposed amendments to the 2023 Finance Act. Muktar Mohammed, an esteemed Analyst at Assar Investments, shared his insights during a recent discussion on CNBC Africa. Mohammed expressed caution regarding the potential impact of earnings on the market, noting that current market conditions may have already factored in some of the expected earnings. He highlighted concerns about certain sectors such as manufacturing, conglomerates, and the telecom industry, which have shown continued weakness in previous reporting periods. The volatility in the exchange rate further adds to the uncertainty surrounding the market, particularly in relation to potential exchange losses impacting businesses. While the banking sector had initially been viewed as a beacon of hope, the impending financial bill has introduced a new layer of apprehension among investors. The proposed amendments to the Finance Act are expected to have an adverse effect on bank earnings, potentially dampening market performance. Mohammed underscored the significance of government policies in shaping market sentiment, pointing out the lack of a cohesive and strategic approach in addressing economic challenges. He emphasized the need for stakeholder engagement and a clear roadmap to instill confidence among investors, both locally and internationally. The erratic nature of policy decisions, coupled with a reactive 'fire-brigade' approach to economic issues, has exacerbated uncertainty and eroded trust in the economy. Amidst the prevailing economic headwinds, Mohammed called for a more collaborative and transparent process in decision-making to foster a conducive investment environment and spur sustainable growth. As the Nigerian equities market braces for a critical juncture marked by half-year earnings and regulatory changes, stakeholders are urged to navigate the evolving landscape with caution and adaptability.