Rebased GDP’ll attract foreign investors –FDC The newly rebased GDP numbers implies that the Nigerian market has potential and will serve as an alternative investment destination to international investors, the Financial Derivative Company Limited (FDC) has said. FDC in a report issued on the rebasing of Nigerian GDP noted that as Nigerian government officials bask in the afterglow of a nominal increase in its GDP, the forecast of a lower rate of inflation for March will come as more good news. The analysts at the FDC disclosed that the National headline inflation rate (CPI) has been on a declining trend since January 2013 which, according to them, reflects the result of the sustained contradictory contractionary monetary policy of the CBN and eases the pressure on the apex bank, giving the CBN Governor-designate more options and room to operate. “We are forecasting a marginal decrease in the national headline inflation to 7.64 per cent in March. This could bring the CPI to its lowest level since January 2008. The benign inflationary trend in a rebased GDP environment multiplies the options for fiscal and monetary policy makers. Nigeria’s economy now at $510bn ahead South Africa as the largest in Africa implies that Nigerian market has potential and will be attractive to international institutional investors,” they said. The analysts noted that the all share index of the Nigeria stock exchange gained 5.06 per cent in the last month after a sharp YTD decline of 8.99 per cent, adding that the index rally was buoyed by companies year- end results as investor interest in tier-one banks remained strong. The financial services sector staged a comeback, riding on the impressive full year 2013 results. However, the recent gain is a relief rally and the market is not expected to record any significant rise in the near term due to profit taking by investors. They noted that the low rate of inflation in addition to the bearish stock market enhanced investor sentiment for fixed income securities, adding that YTD bond yields averaged 13.46 per cent compared to 13.39 per cent recorded in 2013, strengthening investors’ appetite for bonds in a stable inflation environment as an alternative to equities
Posted on: Mon, 14 Apr 2014 09:41:59 +0000
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