The Association of Capital Market Academics of Nigeria (ACMAN) has expressed optimism that the financial, agriculture, construction and information and communication technology (ICT) sectors would drive stock market activities in 2021.
ACMAN president, Prof. Uche Uwaleke, disclosed this in an interview on Tuesday in Lagos.
Uwaleke added that construction and manufacturing sectors would drive stock market activities this year, going by their past performances.
He said these sectors would performance very well in spite of the second wave of COVID-19.
“Non-oil sectors that are expected to drive the economy in 2021 and the stock market are agriculture, Trade, financial Sector, construction and ICT.
“Apart from trade, which contributes about 14 per cent to GDP, all the other sectors are already in the positive territory.
“The financial sector, especially the banks and the telecoms sector, appear to be insulated from the impact of COVID-19 going by their performance in 2020.
“So, it is expected that these sectors will still perform well regardless of the second wave of the pandemic,” he said.
Uwaleke also a professor of Capital Market at the Nasarawa State University Keffi,said that sustained use of online transactions by banks’ customers and network data by mobile phone users would continue to impact positively on the bottom line of these companies.
“For agriculture and construction, the implementation of the 2021 budget, which has given priority to these sectors as well as increased interventions by the Central Bank of Nigeria will enhance their performance.
“This is why in the equities market, stocks like Dangote Cement, BUA Cement, MTN Nigeria, Airtel Africa, Presco, Okomu Oil, GTB and Zenith are expected to do well in 2021.
“The trade sector is expected to improve following the full restoration of economic activities and removal of movement restrictions.
“The sector will also benefit from the reopening of the land borders and take-off of AfCFTA,” he added.
According to him, transportation and free movement facilitate trade as opposed to lockdowns.
Uwaleke explained that manufacturing, which contributes about 10 per cent to GDP, would equally benefit as supply chain disruptions are eased.
He stressed that lockdowns would affect supply chains, decrease output and increase inflation.
The nation’s bourse closed 2020 upbeat, appreciating by 50.03 per cent with the All-Share – Index crossing the 40,000 mark on the last trading day, in spite of COVID-19 pandemic.
Specifically, the All-Share-Index which opened trading for the year at 26,842.07 inched higher by 13,428.65 points or 50.03 per cent to close at 40,270.72.
Similarly, the market capitalisation rose by N8.098 trillion to close at N21.056 trillion from the opening year figure of N12.958 trillion.
On policies to pursue in 2021, Uwaleke said the federal government and the apex bank should sustain the expansionary fiscal and monetary policies commenced in 2020 in order to facilitate economic recovery.
He called on government to scale up the Social Intervention Programme and ensure lockdowns and movement restrictions are not deployed in response to the pandemic.
Uwaleke said the government should lift all restrictions on economic activities and emphasise more of preventive measures and observance of COVID-19 protocols.
“The CBN should sustain its Loan to Deposit Ratio and scale up interventions, especially in the agriculture value chain,” he said