Some economists on Monday said the anticipated passage of the 2018 budget this week would impact positively on the performance of the Nigerian capital market.
They told the News Agency of Nigeria (NAN) in separate interviews in Lagos that the expected passage of the budget was a positive signal that would reflect in the upward movement of market indices.
Head of Banking and Finance Department, Nasarawa State University Keffi, Prof Uche Uwaleke, said the anticipated passage of the budget would account for some positive movements in the market.
Uwaleke said the Senate had said the report of the N8.612 trillion appropriation bill would be considered and passed on May 16, 2018, six months after it was laid by President Muhammadu Buhari.
He said the effect of the rising crude oil price on the back of United States withdrawal from the Iranian nuclear deal would also be positive for the market.
Uwalake said the market had been down because there was no economic trigger for upward price movement which led to selling sentiments.
According to him, banking and industrial goods stocks will also determine the direction of the market, especially those of Dangote Cement, Zenith Bank, GTB and Stanbic IBTC.
He said the three banks were recently appointed by the Central Bank of Nigeria (CBN) as settlement banks for the China-Nigeria currency swap deal.
Uwaleke said some investors would tend towards Dangote Cement because of the recent appointment of some influential people to its board, including the wife of Bill Gates.
Prof Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun, said the negative trends exhibited by the market was in reaction to the sluggish movement or growth of the economy due to delay in the passage of the budget.
“Hopefully the budget will be passed this week to bring some light into federal government’s policy direction.
“The budget will serve as a guide to the investment decisions of business units in the interim until government spending in the next few weeks start playing catalytic role in driving economic activities.
“So this week, there is the likelihood that the stock market will give mixed results firstly in anticipation of the passage of the budget and later in response to the passage, if it eventually happens,” Tella said.
Recall that a total turnover of 1.59 billion shares worth N25.99 billion were exchanged by investors in 21,115 deals last week.
This was in contrast with 1.33 billion shares valued at N20.84 billion transacted in 18,695 deals in the preceding week.
The Financial Services Industry led the week’s activity chart with 1.36 billion shares worth N20.38 billion traded in 11,936 deals.
The sector contributed 85.80 per cent and 78.40 per cent to the total equity turnover volume and value respectively achieved during the period under review.
The Consumer Goods Industry followed with 52.73 million shares worth N2.125 billion transacted in 3,301 deals.
The third place was occupied by Oil and Gas Industry with a turnover of 50.092million shares valued at N783.72 million in 2,153 deals.
The NSE All-Share Index lost 196.41 points or 0.48 per cent to close at 41,022.31 against 41,218.72 posted last week.
Also, the market capitalisation which opened at N14.931trillion shed N71 billion or 0.48 per cent to close at N14.860 trillion. (NAN)