Peter Egwuatu
17 November 2008
The bulls consolidated their hold on the stock market last week with investors recovering N785 billion in six days since the market picked up last Wednesday.
The market actually recorded 20 price gainers as against none during the bears' reign.
Market operators said some of the stocks especially in the banking sub-sector have reached their bottom price and have started rising. They further attributed the current upsurge in the market to policy induced by regulators, a situation which has rekindle investors confidence.
According to them, the NSE, during the peak of the depression had advised quoted companies, especially banks to buy back their shares or face hostile takeover following the stock market meltdown. It is likely that some of the banks have started buying back their shares.
Last week, Financial Vanguard reported extensively on the possibility of hostile take over of some of the banks whose stock prices were not better than prices of pure water should they fail to take advantage of the policy. This may have encouraged them to buy back their shares given the interest generated by banks on the story.
Specifically, the Nigerian Stock Exchange (NSE) market capitalization, which is the major stock market gauge, began its recovery last Thursday, November 6, 2008 at N7.404 trillion to close last week Thursday at N8.190 trillion. This represents a growth of 10.6 per cent. In the same vein the All-share index appreciated by 3,579.53 basis points to close last Thursday at 37,333.64 from 33,754.11 points.
Also stockbrokers added "Since the market started picking up, inventors are no longer willing to sell. Some of the blue chip stocks are even scarce and not available for buyers. It is our believe that the current upsurge would be sustained temporarily and then decline due during the December festivity when investors would need money to meet their family obligation" .
They further stated that the stock-broking firms which are the most affected of the operators in the market place have been doing much in terms of marketing.
"They are not only the market vanguards but also to say the most enlightened stakeholder in the marketplace. Being more aware, the big stock broking firms have been gingering some investors to start re-entering the market at this time to take absolute advantage of the very low prices of stocks; many of which have now become obviously under-priced. Those who enter now will obviously reap abundantly if the rebound is sustained.
Meanwhile, the NSE has hailed the recent rally in the stock market, promising stricter and better regulatory functions in order to forestall a re-occurrence of the meltdown that bedevilled the market since the first quarter of the year.
Director-General of the NSE, Professor (Mrs.) Ndi Okereke-Onyiuke said the halt in the meltdown was expected, especially with the attractive fundamentals of listed securities on the Exchange.
According to her, "We are very happy that the market has finally rebounded. We should be aware that the market belongs to everybody, since the stockbrokers are not dealing for themselves.
This is the first time that we have experienced such decline in the history of the market; it took a longer time than any other period. This period have shown that everybody should join hands together to ensure the capital market grows from strength to strength."
Be the first to Write a Comment!
Copyright © 2008 Vanguard. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
