Capital market operators have expressed optimism that trading would stabilise on the Nigerian Stock Exchange (NSE) in no distance time in spite of the falling oil price and COVID-19.
They spoke in Lagos, while reacting to persist decline in the equities market occasioned by slump in global oil price, fear of devaluation and wide spread of COVID-19.
Mazi Okechukwu Unegbu, the Managing Director, Maxifund Securities Ltd., said that trading would normalise on the NSE in the next three months.
“We are not alone in the world; world economy also affects our economy and the stock market.
“Quoted companies fundamentals are very sound and they are churning out impressive results and dividends.
“Investors should not panic; they should take advantage of the Central Bank of Nigeria (CBN)’s policy measures and start juggling their assets.
“I believe some of them should move away from monetary assets and go to capital assets, which is the capital market to take advantage of reduced interest rates on fixed income instruments,” he said.
Unegbu, also former President, Chartered Institute of Bankers of Nigeria (CIBN), observed that the stock market had been declining, even before the emergency of coronavirus.
He noted that the demutualisation of the exchange when completed would deepen market liquidity and activities.
Unegbu, however, urged the management of NSE to ensure quick completion of the demutualisation exercise for the market to reap its accrued benefits.
Also, Alhaji Rasheed Yussuf, former President, Association of Stockbroking Houses of Nigeria (ASHON), called on stock market investors to shun panic dumping of shares.
“Investors should start buying and take advantage of the price depreciation to increase their holdings in the market.
“It’s not that the companies are not doing well; the developments in the world economy will soon ease off.
“Stocks prices have gone so low and it’s an opportunity for entry, because the companies’ fundamentals are strong,” Yussuf said.
Commenting, Malam Garba Kurfi, Managing Director, APT Securities and Funds Ltd., called on investors to watch the market carefully to enable them to enter at the right price.
Kurfi explained that most stocks had recorded 52 weeks price low level, noting that Zenith Bank, which traded as low as N10.85 recently, appreciated by 25 per cent to close trading on March 17 at N13.50 per share.
He, however, stressed the need for margin loan facility in the market, especially for banking stocks to cushion the effect of persist bearish market.
Kurfi called on the capital market regulators to ensure active implementation of margin loan facility in the stock market.
All-Share Index reports dropped by 3, 546.26 or 13.49 per cent last week to close at 22, 733.35 compared with 26, 279.61 posted in the preceding week.
Also, the market capitalisation shed N1.85 trillion or 13.49 per cent to close at N11.847 trillion against N13.694 trillion achieved in the previous week.
