Global stocks rebounded on Friday as investors appeared willing to put their faith in vast stimulus moves from central banks and governments to shore up economies against the fast-spreading coronavirus pandemic. However, the gains were not enough to offset the previous days’ rout as stocks were still headed for a weekly loss.
The US (DJIA: -13.4percent; S&P: -11.1percent) and European (STOXX Europe: -0.4percent; FTSE 100: -1.8percent) shares were on track to close the week in the red. Asian shares (Nikkei 225: -5.0percent; Shanghai SE: -4.9percent) made a partial comeback from the global rout on Friday but still nursed massive losses for the week. Emerging markets (MSCI EM: -14.0percent) and Frontier markets (MSCI FM: -8.0percent) were not immune to the global rout, with significant losses in South Korea (-11.6percent) and Kuwait (-6.6percent) weighing down the respective indices.
In Nigeria, despite the massive sell-off in the equities market amid the double whammy of tumbling oil price and devastating effect of the coronavirus, opportunities abound in the local bourse for medium to long-term investors.
As of Friday, Month-To-Date and Year-To-Date losses increased to -15.3percent and -17.3percent, respectively. Given the effectiveness of social distancing measures to fighting the spread of COVID-19 and its wide adoption globally, there are chances that economic activities would kick start by the second half of the year which would support crude oil prices and market performance.
The current low price provides a gradual entry approach into the Nigerian equities market given the uncertainties both on the global and domestic fronts.
According to some investment houses, top picks include a collection of liquid stocks with high dividend yields and strong fundamentals. These include GUARANTY, ZENITH, STANBIC, FLOURMILLS, UBA, MTNN, NESTLE, OKOMU, DANGCEM, UCAP, ACCESS, and NASCON.
Disclaimer: Figures are gathered from the Bloomberg Terminal