Stock Market Slowly Recovers, Gains N23bn
There were sighs of relief yesterday that the end to the “self-correction” of the Nigerian Stock Exch-ange (NSE) is near as trading at the stock market closed on a positive note.
As last Friday, the NSE market capitalisation had lost N1.17 trillion within a period of two months.
But yesterday, the market recovered marginally with the NSE capitalisation appreciating by N23 billion or 0.2 per cent from N11.430 trillion to N11.453 trillion.
This compares with a fall of 0.5 per cent or N61 billion last Friday.
Volume of trading also recorded an improvement on Friday’s performance. Investors exchanged 1.258 billion shares worth N22.803 billion in 17 deals, up from 519.511 million shares valued at N10.383 billion traded in 14,210 deals last Friday.
Some operators said the upward trend may be sustained if the corporate results being turned out remain positive.
“The positive trend witnessed at the market may be sustained if the corporate results remained positive and investors are given adequate rewards. But the bears will make occasional entry because investors are still selling to meet financial needs,” Mr. Wale Agbeyangi of Cordros Capital Limited said.
The Managing Director of Crane Securities Limited, Mr. Mike Ezeh, also said the market is awaiting the results of banks and other companies that have March 31 as their year end.
“If the results are positive, this will help to restore investor confidence and boost demand for stocks. This may lead to a sustainability of the upward movement in the market,” he said.
Market regulators and operators had assured investors that the bearish trend, which began last March, was a normal correction that would stabilise very soon.
For instance, the Head of Media, Securities and Exch-ange Commission (SEC), Mr. Lanre Oloyi, said investors should not panic.
“We at SEC are not disturbed by what is going on in the market. That is the nature of the stock market all over the world. Price making is a function of demand and supply based on companies performance, hearsay and others. The fall in price could be due to low demand by investors. Once the demand for shares improves everything will normalise. We are confident that the market will not crash,” Oloyi said.
Speaking in the same vein, the Director-General of the NSE, Prof. Ndi Okereke-Onyiuke, said: “Our capital market can not crash because the fundamentals in terms of price, capacity for growth, listed companies’ potential and the economic horizons are all in favour of the market.’’
Explaining the bearish trend, the Managing Director/Chief Executive of Goldman Assets Management Limited, Mr. Olu Abayomi Sanya, said the downward trend is temporary, and advised investors not to panic.
Sanya blamed the bearish trend partly on the delay in the passage of the 2008 budget.
“Another major factor is the Central Bank of Nigeria (CBN)’s pronouncement on margin loans. Since the CBN gave the directive, some of the banks that gave out margin loan facilities are recalling the loans. This is affecting the liquidity in the market,” he told THISDAY in a story published yesterday.
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