By Adedapo Adesanya
Things are not looking well for investors at the Nigerian Stock Exchange (NSE) due to the bearish trend that has plagued it and an expert in the field has blamed the President Muhammadu Buhari-led administration for being the cause.
Chairman of the Association of Securities Dealing Houses of Nigeria (ASHON), Mr Patrick Ezeagu, in a chat last month, said market began to fall when the President kept investors in the dark by not announcing members of his cabinet almost four months after he was sworn in for a second term in office.
According to Mr Ezeagu, this singular act by Mr Buhari sent the wrong signal to investors, who felt the present government was not serious for governance.
“The bearish trend has to do with the fact that the government is yet to settle down after the elections,” the stockbroker said, adding that “core investors are awaiting a couple of things, including announcement of ministers of the federal republic and the economic team to show the clear direction of the government.”
Even with the screening of ministers by the Senate earlier in the month, market sentiment remained weak so far in August, with the All Share Index down by 286 basis points month-to-date, amid unimpressive macro and global conditions.
The NSE said a total turnover of 726.607 million shares worth N10.459 billion in 12,915 deals were traded last week by investors on the floor of the exchange, in contrast to a total of 1.081 billion shares valued at N12.014 billion that exchanged hands the previous week in 16,246 deals.
Despite the addition of N1.4 trillion into the market as a result of the listing of Airtel Africa Plc shares on July 1, 2019 on the stock exchange, total market recapitalisation has seen lost N645 billion since President Buhari was sworn in on Wednesday, May 29, 2019.
Total market capitalisation stood at N13.766 trillion a day after the President’s second term inauguration, however, as at last Friday, the market capitalisation finished at N13.121 trillion.
Business Post reports that after the Sallah holiday last week, stock investors in the nation’s equity market lost a total of N186 billion.
But despite the situation of things at the equity market, Mr Ezeagu said, “Astute and professionally guided investors should take position now that most stocks are trading lower than their net realisable asset value and expect handsome returns when the market shall eventually rally.”
Dipo Olowookere