Nigeria’s financial services sector, especially the banking industry has always shown resilience in good and bad times of the nation’s economy cycle, despite the overregulation and rising level of non-performing loan driven by a high exposure to oil and gas sector at a time its price on the international market has crashed considerably and only now on the path of recovery. Other factors include the devaluation of the Naira (the Central Bank of Nigeria is currently working at stabilising), exposure to the power and manufacturing sectors by the banks, all of which were propelled by the weak macro-economy due recession and rising inflation rate that stood at over 18% in December before recording its first decline in February after 15 months of gradual but consistent growth as the country remained in recession all through 2016.
The recently released audited numbers reveal the latest position of players in the sector in 2016 as they recorded gains in the last quarter of 2016, which they hope to consolidate in the first quarter of the year as the forex policy continued to favour the sector. This should lift the stocks to new highs at mid-year. This financial sector is set to lead the next rally and these INVESTDATA picks will lead the moves.