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Stakeholders wary of stock market recovery in Q4

By Helen Oji
07 October 2015   |   1:35 am
monthsCapital market stakeholders have predicted that the downturn witnessed in the equities market during the last quarter would be extended to the current quarter (Q4).
PHOTO: www.ibtimes.com

PHOTO: www.ibtimes.com

• Urges regulators to focus more on attracting domestic investors • Index slides by 4.7 per cent in nine months

Capital market stakeholders have predicted that the downturn witnessed in the equities market during the last quarter would be extended to the current quarter (Q4).

The stakeholders, who spoke in an interview with The Guardian, explained that the nation’s capital market has recorded unprecedented lull due to volatile forex and macro-economic concerns, even as foreign portfolio flows to emerging markets turn negative. Spillover effect from China and fall in commodity prices were responsible for poor global equities market performance.

The market experienced sustained volatility as investors’ exited positions and speculators went bargain hunting. They, however, urged regulators to channel their resources toward attracting more domestic investors to the market, adding that the regulators are in position to develop the market and protect it against the level of volatility currently being witnessed.
Specifically, the market capitalization of quoted equities, which opened the year at N11, 237 trillion as at January 5, 2015 now stand at N10, 728 trillion as at Wednesday, September 30, down by 4.7 per cent in 9 months, while the All-share index slides by 2725.58points from 33,943.29 to 31,217.71.

The President, Progressive Shareholders Association Nigeria,
Boniface Okezie argued that the market would not record any sign of recovery even with the announcement of key cabinets positions in this Q4.He pointed out that the appointment of ministers alone would not sustain market rebound, rather, he urged regulators to do every thing within its powers to attract more local participation in the market.

“This year is ruled out for economic and market rebound.

The names that are out, may be by the time people start considering their pedigree, it can push the market but not immediate. We should not be jubilating yet. A lot of things have gone wrong while a lot need to be put in place to sustain market recovery.

“The dominance of the capital market by foreign investors was detrimental to the country. The ministers can not come to the market to put all these in place, it is the duty of the regulators woo these domestic investors that exited the market during the recession back to the market,” he added.

The General Secretary, Independence Shareholders Association of Nigeria, Adebayo Adeleke also doubts the possibility of the Q4 becoming better than the last three quarters.

“While hope and optimism drive the world, it is unlikely that the Q4 will be different from the last three quarters of the year.”

An independent investor, Amaechi Egbu explained that many Nigerians do not have confidence in the market as they recorded huge losses in the past with no compensation.

He urged regulators to intensify efforts aimed at enlightening Nigerians about the market as well as promoting products for them to invest in.

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