Capital Bancorp rates 2016 a better year for investors

The Managing Director of Capital Bancorp, Mr Aigboje Higo, says 2016 was a good year for investors in the Nigerian capital market.

Higo stated this in Lagos as he compared investment performance between 2016 and 2015.

Higo explained that in spite of the enormous challenges such as the recession in 2016, the year-to-date return in 2016 was slightly better at -6 percent, as against -11 percent recorded in 2015

He said investors who took advantage of the downturn of the market early 2016 were better for it at year end, citing the example of GTB which grew over 35 percent in the course of the year.

Higo also shared deep insights on the 2016 market performance with respect to the bond and stock markets and how various macroeconomic variables like the inflation rate, exchange rates the current economic recession has impacted their performance and ultimately the interest rate generated.

He, however, emphasized that though the Oil and gas sector did fairly well towards the end of 2016, the volatility of stock in that sector could be highly attributed to the fact that the sector has not been fully deregulated. He noted that a measure of the financial services firms who had been exposed to the volatility of the oil and gas sector are well equipped for it. He said the Banking industry is still vibrant and just like every other sector has challenges, they are well equipped and have good experience in weathering the storm

“As the price of oil goes up, the fundamentals of these companies improve and the banks’ loan books begin to look better,” he said

According to the research firm’s circular, “the 2016 investment year will remain indelible in the minds of investors on the Nigerian Stock Exchange. This stems from the fact that the nation’s stock market in the reviewed period experienced a major setback which eroded investors’ confidence with over N1 trillion drop in market capitalization.

The nation’s Gross Domestic Product (GDP) recorded a negative growth of -2.1 percent, with the Naira exchanging for N304 per dollar at the official market in the latter part of the year.

However, most stakeholders attributed the prolonged downward sentiment in the equities market and economy in general to tight macroeconomic policies, falling crude oil prices which thwarted stakeholders expectations and led to the exit of foreign investors”