The Nigerian
economy will experience a surge in the third and fourth quarter of this
year as the country begins to put behind her the aftermath of the April
elections. The economy sectors that would generate significant interest
are the equities market and the property development sector.
Haruna Jalo-Waziri,
managing director of UBA Asset Management Limited, gave this positive
outlook while addressing high networth and institutional investors
yesterday in Lagos.
He also said
foreign direct investment (FDI) would receive a boost as foreign
investors would be interested in making considerable gains in the
Nigerian market.
“Prior to
elections, we see nervousness but over the years we have seen that when
it matters most, Nigerians come together to take a decision that is
good for the country. The truth is that with oil at $100 per barrel,
everybody wants to make sure that it turns out well because it pays
everybody to have that extra naira in the pocket rather than have what
is happening in Egypt or Tunisia,” Mr. Jalo-Waziri said.
Preferred destination
He said with
developed market expected to make marginal gains, emerging economies,
of which Nigeria is prominent, will be the preferred destination by
investors.
Mr. Jalo-Waziri
further said with Nigeria’s GDP (growth domestic product) growth rate
of above 7.5 as projected, the economy provides a good window for
investors, both local and international, to make good returns on
investment.
This enthusiasm is
shared by Razia Khan, Regional Head of Research, Africa Global Research
at Standard Chartered Bank, London. In her global focus on Africa
released yesterday, Ms. Khan said that Africa has seen a gradual
improvement in growth since the global economic crisis, when GDP
declined to just over 1 per cent.
“But the region
managed to avert an outright contraction. A number of factors were
responsible for this – good growth momentum before the crisis, the
relatively quick stabilization in commodity prices post-crisis, and not
least, within the region itself, an unprecedented level of fiscal and
monetary stimulus in response to the slowdown,” Ms. Khan said.
Mr. Jalo-Waziri
said the exclusion by the Central Bank of Nigeria (CBN) and Securities
and Exchange Commission (SEC) of bank shares from margin loans and
reduction of margin-related borrowing rate to 10 per cent of banks loan
portfolio, would reduce price volatility of bank shares.
“Favourable macroeconomic environment for FDI inflows will provide a much needed boost to the stock market,” he said.
UBA Asset
Management Limited is a wholly owned subsidiary of United Bank for
Africa. In 2006, it simultaneously floated four mutual funds, the UBA
Balanced Fund, UBA Equity Fund, UBA Money Market Fund, and the UBA Bond
Fund for N1 billion each at N1 each.
The funds currently
have assets worth about N5.7 billion out of over N31 billion managed by
the firm and accounts for about 3.5 per cent of the Nigerian mutual
funds market currently estimated at N135.2 billion.
