Insider information not common in Nigeria’s equities market – Analyst

Against the backdrop of speculations that insider information has been instrumental to bullish performance of some stocks in the market before the release of their end of year result, reverse has been the case.

An investment analyst told Daily Times Nigeria that increased buy mandates on some companies stocks in the prevailing period was based on expectations of their end of year results and expected dividend declaration.

Investment Researcher with Afrinvest West Africa, Mr. Robert Omotunde told Daily Times in a telephone interview on Thursday that investor’s hinge their investment decisions on

fundamentals and performances, adding that past results are taken into consideration to preempt the next quarter result which propels investment decision.

Mr. Omotunde said that every first quarter of the year is usually seen as beginning of earning season for the year and investors thrive to benefit from the expected earnings by looking at the companies previous results to determine what their end of year result would look like.

I don’t think there is insider information, remember that this is earning season when full year result is expected to be released, some investors would like to take advantage of the expected results to take positions in order to benefit form the envisaged earnings”
He said that such expectations drove increased investments in Access Bank, Zenith Bank, GTBank and even UBA which is yet to release their results.

He said that even as the Central Bank of Nigeria (CBN) has given new considerations for forex procurement for special needs like Scholl fees and medicals, such has not really impacted the market, but projections and analysis of performances based on past results, remain the driving force of increased buy mandate inn the equities market.

He said that, based on past results, before te release of fourth quarter result of some banks and companies, the industry or the market was aware of what to expect in the Q4 results, and it was based on this that investments decisions were taken in the banks and other companies that recently released their results.

He said “Zenith Bank, Access Bank and GTBank have not done anything significantly different from their third quarter results” adding that the reactions generated by tier one banks, is usually not seen in mid-tier banks because investors already know what to expect from their results before they are eventually released.