EXPERTS have blamed the prevailing selling pressure in the stock market on investors' lack of confidence, insecurity in the country, the festive seasons of Salah, which just ended, and the approaching Christmas and New Year.The experts, among whom are stockbrokers, investment analysts and advisers, also explained that the market experiences occasional appreciation because discerning investors are taking advantage of the current low price to acquire the stocks of blue chip firms.According to them, many people are unwilling to invest in stocks now because of the loss of confidence occasioned by the great losses they suffered in the recent stock market crash and market regulators' reluctance to punish those who perpetrated the malfeasance that gave rise to the ugly development.Mr. John Osuoha, a stockbroker with Bringforth Investment Limited, member of the Nigerian Stock Exchange, told The Guardian in Lagos, last week, that the major factor responsible for declining share prices is selling pressure induced by investors' loss of confidence in the market.According to him, the loss of confidence is making investors to dump their shares, blaming lack of control and the reluctance by the authorities to punish those, who, through sharp practices, made the market to crash, for their woes.The other cause of the bearish trend, he said, is the poor security situation in the country, which is scaring away foreign investors.'No foreign investor is willing to invest in the market now because of the fear of Boko Haram and other insecurity issues in the country. They (foreign Investors) are waiting to see how the government will enhance security and improve on poor power situation. The basic infrastructure needed to do good business in an economy are lacking. So, serious investors are not willing to invest now until the government convinces them that it is not business as usual,' Osuoha said.He, however, disclosed that given the reform works currently embarked upon by the new regulators, the market would soon begin to experience a rebound.He stressed that discerning investors, who know how to make profit from stock business, always take advantage of the current low price of shares to invest heavily in the stocks of viable firms, predicting that the market, from its present low ebb, will bounce back early next year.But Godwin Ashikordi, CEO, Artmark Global Resources Limited, (investment advisers), observed that the stock prices are going down because there is no more attraction to invest in stocks and those who have invested in the market are dumping their shares to channel their funds into other lucrative ventures like importing and trading in fast moving consumer goods.He said some investors, who need money to prepare for the Christmas and New Year celebrations are also selling off their shares to raise funds.He predicted that should the bearish trend persists in the New Year, it would lead to difficult times for the quoted companies as the low prices of their shares will render them unable to raise enough fresh funds from the capital market for expansion or even replace old machinery, a development, which he feared, would further stunt the economy and lead to more retrenchment of workers and dearth of new jobs for the youths.While enjoining government to do something to halt the trend, Peter Azuka, a stockbroker based in Lagos, pointed out that the plummeting value of equities, which is rapidly eroding market capitalisation is a sign that the economy is on the downward trend and that if it continues the way it is currently going, shares of many companies will become worthless.Though the market has generally been bearish, the bulls sporadically attack it, thus justifying experts' explanation that discerning investors have indeed been on the prowl to acquire the currently undervalued equities of the blue chip companies.For example, the market, which closed on bearish note on Friday, November 9, with capitalisation of N6.255 trillion, closed on positive note on Monday November 12, at N6.256 trillion. The bulls persisted in the market on Tuesday November 13, pushing up capitalisation to N6.282 trillion. But on Wednesday, November 14, profit taking pushed down market capitalisation to N6.266 trillion. And at the close of business on Friday, market capitalisation appreciated to N6.331 trillion and All-Share Index went up by 240.91 points or 1.2 per cent to close at 20,025.94. The NSE-30 appreciated by 13.61 points or 1.5 per cent to close at 895.20. Two of the four sectorial indices appreciated too compared with the preceding week when all the four indices depreciated.Food/beverage appreciated by 5.20 points or 1 per cent to close at 558.26, banking went up by 7.55 points or 2.9 per cent to close at 263.08. However, insurance depreciated by 2.63 points or 1.8 per cent to close at 144.02 while oil/gas dipped by 11.23 points or 4.8 per cent to close at 225.14.
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