Investing in the Nigerian Stock Market – Sectors and stocks to visit in 2009

Think back to the year when Nigerians made huge profits in the stock market. This is 2008. The same year has qualified as the worst year for investors. The power of greed was so great that it pushed stock prices beyond their true value.

Those who are well known and experienced have made the most profit and exited the market. Others who were moved by the influence of the herdsmen were not so fortunate. They were stuck with falling prices. It was a painful experience for the speculators. Statistics show that investors lost about 3.9 billion naira.

Stock prices in the Nigerian stock market now look very attractive but investors are afraid to take the risk of putting new funds in the market. Emotions of fear are really reigning now. Smart investors know that this is the right time to buy cheap and earn high amounts. But what will be the basis of your investment drive at this time?

There are widespread concerns about the global recession, the freezing of bank margin facilities, the devaluation of the Naira, and the general recession of the economy. As a pioneer investor, what criteria should you use to select stocks during this difficult time?

That is the question I want to answer in this article.

Consider the factor

1. Historical stability

Companies with a history of profitable performance over the years will continue to improve the best practices to please investors, regardless of any unforeseen circumstances. Note that First Bank took a risk some time ago to invest in Nigeria’s emerging communications market through ILL. That deal went awry, but as a result, it did not come under the control of the bank. Year after year, it continues to post favorable results and dividends and bonus issues to paid investors. Currently, these stocks delight investors. First Bank has been consistent over the years and has a strong reserve base.

2. Competitive advantage

Companies with premium performance in the market have a better chance of surviving this difficult time than competitors. Strong brands like Cadbury and UACN will continue to make waves in the market. Their products have been permanently registered in the minds of Nigerian consumers. These products will continue to be sold. They are even restructuring and introducing new products that consumers are buying. The more people sponsor these products, the greater the profitability with better management of human and material resources.

3. Strong financial foundation

Companies that have been building reserves from profits year after year need to finance some projects this bearish season that will add value to their market and give good returns to investors. UBA and GTB are building financial powerhouses. Strong reserve bases are mainly responsible for their expansion in foreign markets. You can see the pure gold here. What do you think investors will enjoy when those foreign branches start making profits? Good times and of course high returns on investment, especially on bull returns.

4. Extremely profitable

Not all companies have the ability to manage assets well for maximum profit. The tax management of some organizations is so weak that it eats away at their profit margins. In the banking industry, Oceanic Bank differs in prudent tax portfolio management. Profit is not the key. Enough skill to keep gives pleasure to investors.

5. Roughly underestimated

The equities that are devalued rebound in the first bullish market. You’re not going to get the bull back. Your profit margin is determined by the time of your investment. Taking a risky investment when a company is undervalued guarantees you a high return when the market recovers. Unity Bank is currently enjoying agricultural benefits on loan terms from the World Bank. 3 Naira is below the current market price, the stock is grossly devalued

Winning attitude for predictable gain

* Continue to invest fully

* Invest in fundamentally strong equities

* Ignore economic forecasts and be determined to excel in any economy. The stock market always exceeds the long term and as far as your money is concerned the only solution to inflation

* Continue to acquire more financial and investment skills

* Be less emotional in your decisions

To view sectors and stocks

1. Agriculture

The sector is on the rise as a major contributor to Nigeria’s gross domestic product and earnings. New frontiers in livestock and cocoa processing are yielding positive results. Listed companies such as FTN Cocoa Processor, Livestock Feed and Okomu Oil promise good prospects.

2. Food and drink

Even in a recession, people will continue to demand food and its confectionery. The reason why this sector will perform is simple. The demand for food and drink will continue as long as people survive. Combined with good management, companies in this sector such as Dangot Sugar, Tantalizer, Flower Mills and Honeywell will delight investors in paying dividends.

3. Banking

Nigerian banks are currently aggressive in their expansion drive in Africa and beyond. Earnings and profits will soon begin to be reflected on the balance sheet. Some banks such as First Bank, UBA, GTB, Zenith and Bank PHB have performed well and will continue to reward investors during the reign of the Bears.

4. Communication

Nigeria’s communications sector is one of the fastest growing in the world. Despite all the infrastructural challenges, companies operating in this sector are making huge profits and in 2009 investors stood to gain even more from their activities. Starkom is the only stock listed on the Nigerian stock market in this sector Now investing in it would not be a bad idea.

5. sum

History favors this sector. They have the ability to restructure and restructure their business, especially in difficult times. A stock like UACN will continue to delight investors

6. Transportation

Exclusive talk. ABC Transport is the only company listed on the exchange. It has been consistent in paying dividends since it was listed in 2006.

7. Insurance

The insurance sector is currently enjoying goodwill and patronage as investors continue to position themselves for long-term profits. Companies like International Energy Insurance and Cornerstone are very attractive.

Learn to give the largest portion of your available funds to the food and beverage sector to reduce your risk. Thinking long term is a surefire strategy that will ensure your success in 2009 and beyond.