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Sani Ibrahim
Abubakar Tafawa Balewa,University
Agricultural economics and extension
100Level, Nigeria.
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The Nigerian equities market has in recent weeks
recorded impressive gains, as investors take positions in blue-
chip stocks.
The All-Share Index and market
capitalization, on Wednesday, gained 0.50%, to settle at
25,783.02 points and N13.474 trillion respectively, reducing
the YTD loss to -3.92%.
As the COVID-19 virus continues to rattle global financial
markets, including the Nigerian bourse, it became prevalent to
seek diverse opinions about Nigerian equities. In this case,
that of Nigerians living abroad.
Nairametrics interviewed Investment Experts, Traders and
an Engineer, seeking their opinions on what Nigerian Stocks
they will presently consider for a BUY.
Their responses were varied, ranging from
top Banking, Industrial, and unsurprisingly, Agriculture-
based stocks.
London based, Lukman Otunuga , the Senior Research
Analyst at ForexTime (FXTM) said,
“In a world where the coronavirus menace has created
widespread chaos, disruptions, and uncertainty, no prisoners
were taken.
“Oil has been one of the biggest causalities of COVID-19, down
roughly 40% year-to-date (YTD), as worldwide restrictions a few
months back, crippled demand for the commodity. With a fair
chunk of Oil & Gas companies losing billions of dollars to the
pandemic, their respective stock prices declined considerably.
“Big names in Nigeria such as Oando, LekOil, Seplat Petroleum
Development Company, and 11 Plc, among others, have seen
their shares depreciate between 20 to 40% + YTD. However, if
Oil rebounds on stabilizing global economic conditions and a
possible breakthrough in finding a COVID-19 vaccine, this could
provide an opportunity for Oil & Gas companies to roar back to
life – ultimately pushing stocks higher.”
According to France-based Computer Engineer, and
COO, Feldel Gas Limited, Oladayo Oladele,
“Generally speaking, I will be interested in stocks in the IT/
Telecoms sector, which includes MTN Nigeria, Airtel, because
Nigeria has a digital economy that is growing at an exponential
rate. Lots of tech startups like PiggyVest,
Paystack, and Flutterwave are fast becoming internationally
relevant, not forgetting agriculture-based stocks like Okomu oil,
as the border closure by President Buhari’s administration
seems to increase their profitability in the near term.
Finally, FMCG stocks, like Nestle and Unilever, as significant
buying pressures from their offshore-based parent companies,
shows a high room for more upside.
“My bias is that, no matter how unstable Nigeria’s economy
looks presently, these domains are the least affected in my
opinion.”
In the words of Scotland-based Market Analyst, and an Energy
Trader, Dapo-Thomas Opeoluwa, “When it comes to picking
stocks from overseas, it’s a bit difficult, because we do not
know how the companies are faring in the country. Sometimes
we go with Warren Buffet’s recommendation of investing in a
good business.
“So, to be on the safe side, we invest in the household names
that give us dividends, and hopefully capital appreciation in the
long run.
“I invest in Zenith; GTB; Stanbic; Sahco PLC (which are
particularly promising, because of its cheap price and high
potential, given how tourism might pick up, the aviation
company might benefit); and Dangote Plc.
“Sometimes we go through the financials of these
companies, and check if the businesses are healthy and if
they’ve got what we call ‘moat’.
“Notably, because our stock exchange isn’t as fundamentally
driven, as it is in England or the United States, we can’t trade
stocks like we do overseas.”
It is imperative to note that, most of the professionals
interviewed seem unsurprisingly attracted to banking, energy
dominated stocks, and most especially, blue-chip stocks on
their prevalence to Nigeria’s economy.
Many Nigerian stocks still look greatly
undervalued, and exhibit high potential for more upsides, in
terms of their present price action and also attraction
attributes to foreign portfolio investors in the long term.

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