Looking back at 2017, it truly was a pleasant year. Equity investment returns surprised positively and currently stands above 40 percent year-to-date.
Corporate earnings are turning up and commodity prices are humming along quite nicely. Considering the forthcoming year, Investors want to know if 2018 is going to be as "sweet" as 2017.
Despite the recent gains realized, we think strong returns can be achieved in 2018, driven by two themes: First, we note that most of the gains realized in 2017 were driven by large caps.
Despite the recent gains realized, we think strong returns can be achieved in 2018, driven by two themes: First, we note that most of the gains realized in 2017 were driven by large caps.
Nevertheless, we expect small caps to catch up as fundamentals solidify. Secondly, even though banks stole the show in 2017, we see little scope for significant outperformance in 2018, but rather, look favourably to the Consumer goods sector.
With a benign inflation outlook and lower debt burdens, consumers and businesses appear energized. Therefore, we expected the consumer goods sector to be the immediate beneficiary of these fundamentals.
The biggest elephant in the room is oil. Given the over-dependence on oil, the Nigerian equity market is somewhat sticky to oil price movements.
The biggest elephant in the room is oil. Given the over-dependence on oil, the Nigerian equity market is somewhat sticky to oil price movements.
As long as prices remain stable and elevated, we don’t see any other bottleneck that can trigger a negative repricing.
(C) United Capital
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