By Dipo Olowookere
Investors at the Nigerian Stock Exchange (NSE) have been urged to remain calm and not engage in panic sale of their holdings because of the bearish situation of the market at the moment.
This advice was given by Chairman of the Association of Securities Dealing Houses of Nigeria (ASHON), Mr Patrick Ezeagu, during a recent media chat.
He assured that the market would soon get back of its feet because recent earnings released by quoted firms indicated improvements in the economy.
The stock market expert urged investors to take advantage of the current low prices of many blue chip companies to beef up their portfolio, saying further that investors should approach stockbrokers for sound professional advice before taking investment decisions.
According to him, the situation of selling of shares because of others were doing so was not good for the market generally. He explained that two investors may not necessarily have the same motive for sale or buy order.
“Those who are selling off their shares right now are speculators and not real investors. Every stock market needs speculators for liquidity but they can change investment decision in one second. Our stock market is forward looking.
“Investors need not be nervous. They should consult professional stockbrokers for sound investment decision.
“There is no basis for panic sale of shares. Many companies have announced strong financial performance with prospects of increased future earnings. Why should a shareholder of such a company embark on panic sale of shares?
“Globally, stock market gauges the mood of the economy like a barometer. Our market is not a local one. Foreign investors have significant stakes because their analysis has always convinced them that our market has potential for strong return on investment.
“At the moment, 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.
“These are issues that are beyond the board and management of the exchange but have dire consequences on investment decisions.
“The bearish trend has to do with the fact that the government is yet to settle down after the elections. However, 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.
“A mere study of most of the company’s performance figures is most informative and points in the direction of a market that will definitely rally as soon as the economic team of government is in place,” Mr Ezeagu said.
Adedapo Adesanya