THE sell pressure on most stocks in the recent time had caused depletion in the prices of stocks, especially the blue-chips even as market performance indicators recorded negative trend in the cumulative trading figures in the market.Specifically in the previous week, the twin performance indicators, the market capitalisation and All-Share Index depreciated due to the fall in the prices of blue chips that used to raise indices in the market.Further trading in the week also failed to confirm market watchers permutation that there are still potentials in most of the stocks even as they enjoined investors to engage in long term investment not minding the profit takings and portfolio restructuring by the investors that tend to slow activities down sometimes.The return of the bears in the market which has been around since the mid-year became more noticeable after the banks which were taken over were delisted without recourse to the huge investment loss in the banks by investors, just as value of equities seen in the beginning of the second quarter that saw market value moving back and forth has since disappeared. The new trend in the market for some time now has been that immediately investors notice any slight gains in shares, the next thing is to offload their holdings for capital gains.Besides, some of the dividends declared in the third quarter of the year have not also helped to attract the positive reactions expected from the investors as the share prices maintained southward trend as against the expected upward trend expected in their share prices.Recommendations from market expertsSuggestions, as to what investors need to do in the face of the continued losses in the prices of shares, still thrive in the positive trajectory, as most market watchers cum analyst expect investors to invest in the market despite recurrent losses in the recent time.The stocks experts based their believe on the tripod of the listed equities having inherent value; present prices of most stock selling below their real worth and the determination of the present managers in the market to return The Exchange to profitability through verifiable reforms.The meltdown in the price of securities in the stock market beginning from March 5, 2008, has resulted in most companies' stock in the market becoming penny stocks even as confidence is still a bit shaky.The experts are of the opinion that the low price of stocks should make any designing investors to take position in anticipation of capital appreciation, as well as huge return on investment that will follow the trouble banks merger at the close of the third quarter of 2011.According to analysts at First Securities Discount House (FDSH), 'the current improved regulatory oversight on the equities market will boost investors' confidence both locally and internationally.They reason that the only way the market must go after losses that saw most stock becoming penny value is to go northward, even as they explained that the planned merger by some of the trouble banks would see investors take stake again in their shares.Taking a closer look at the market, the Chief Executive Officer, Financial Derivatives, Mr. Bismarck Rewane, foresees an improvement in investors' confidence in the market, though he noted the possibility of profit-taking activity by speculators in the market.He said the market had since bottomed out and that the only alternative left, every other thing being equal, is for the stock market to begin to enjoy some relative stability more especially as issues in the financial sector as it relate to the rescued banks are being sorted out.Issues in the stock marketThe over-dependence of trade in the Nigerian capital market on foreign investors is gradually becoming a topical issue in the equities market.There is the fear that leaving the market for investors offshore can trigger capital flight and rob Nigerians of the opportunity of benefiting from the market.At present, foreign investors constitute over 75 per cent of investment in the equities market, as Nigerians demonstrate apathy to the market, due to poor liquidity, risk aversion and fear of being caught up in the red part of the market again. On the other hand, foreign investors are more risk tolerant and are trading with long term perspective, and analysts say with prices of blue chip stocks hitting rock bottom now, many of these offshore investors pick up these stocks, largely undervalued.But investment experts fear that over- exposure of the market to foreign interest could result in a situation where a greater portion of the returns from the market are repatriated abroad, depending on the type of investors that control the market. These foreign investors are made up of emerging market investors, portfolio investors and hedge funds.Transactions in the weekInvestment on the floor of the Nigerian Stock Market on Monday continued to decline as most capitalised stocks recorded price depreciations resulting to a depreciation in investors' wealth by N19 billion.A review of trading in the day showed that, the All-share index shed by 71.57 basis points or 0.3 per cent from 21,104.10 recorded on Friday to 21,032.53, while market capitalisation dropped by N19 billion or 0.3 per cent from N6,725 trillion to N6,706 trillion.Further analysis in the day's transactions showed that the Banking sector buoyed by the activities in shares of Guaranty Trust Assurance Bank and Zenith Bank were the most active in terms of volume with a turnover of 80.07 million shares worth N636.3 million in 2,224 deals.Insurance sub-sector activated by the activities in the shares of Guaranty Trust Assurance followed with a turnover of 23.4 million shares worth N21.6 million in 123 deals, while Maritime Sub sector ranked third with a turnover of 5.1 million shares valued at N4.5 million in 61 deals.On the price movement chart, 8 stocks appreciated in price, led by Roads Plc with 4.95 per cent to close at N3.82. Custodian Insurance followed with 4.76 per cent to close at N2.64 per share while Flour Mills added 4.01 per cent to close at N83.On the other hand, 25 stocks depreciated in price, Fort Oil topped the day's highest price loser with five per cent to close at N13.49. FCMB and Dangote Flour followed with 4.99 per cent each to close at N4.57 and N6.86 respectively.On the whole, investors exchanged 129.4 million shares worth N1.5 billion in 4,046 deals.Tuesday's transaction on the NSE continued on a downward note, following price losses suffered by major blue chip companies, as market capitalisation dropped marginally by N4billion.22 companies depreciated in price, led by Julius Berger and Vitafoam with five per cent to close at N52.25 and N5.70 per share respectively.Enamelware followed with 4.98 per cent to close at N38.51 per share.FO lost 4.97 per cent to close at N12.82 per share, while Custodian &Allied insurance shed 4.92 per cent to close at N2.51 per share.Honeywell shed 4.90 per cent to close at N3.49 per share while Nigerian Bags Manufacturing Company dropped 4.84 per cent to close at N1.77 per share.On the other hand, UNTL led 13 others on the gainers with five per cent to close at N0.63 per share while May & Baker trailed with4.74 per cent to close at N3.98 per share.Presco, C&I Leasing, Unity Bank garnered 4.48, 4.21 and 3.92 per cent to close at N7.00, N0.99 and N0.53 per share.GlaxoSmithKline added 3.85 per cent to close at N27.00 per share while Guaranty Trust Bank gained 3.37 per cent to close at N12.90 per share.United Bank for Africa and Stanbic IBTC added 3.09 and 2.70 per cent to close at N4.00 and N9.50 per share, while UACN also gained 1.92 per cent to close at N39.75 per share.Consequently, the All-share index dropped by 14.009 basis points or 0.06 per cent from 21,032.53 recorded on Monday to 21,018.52, while market capitalisation decrease by N4billion from N6,706 to N6,702.The banking subsector remains the most active stock in volume terms with 97million shares worth N734million followed by the breweries subsector which traded 21million units worth N1.8million.The Insurance subsector ranked third with 19million units worth N18million in 128deals.On the whole, investors exchanged 171million shares worth N31billion in 4,273deals.Equity transactions on Wednesday reversed to the positive trajectory after two days of heavy price depletion, which resulted in the market capitalisation rising by N58 billion.The rise in the market value in the day's transactions was particularly occasioned by the allotment of Right Issue on the shares of Flour Mills of Nigeria.Specifically, at the close of trading on Tuesday, 14 stocks recorded price appreciation, while 22 constituted the losers table.The twin market indicators, the All-Share index which measures the performance of quoted companies rose by 117.6 points or 0.55 per cent from 21,081.52 recorded on Tuesday to 21,199.16, while market capitalisation increased by N58 billion or 0.86 per cent from N6.702 trillion to N6.760 trillion.Thursday's activities reversed again to a downward note as losses by some highly capitalised stocks resulted in market indices depreciating by N13 billion.The market had gained for the first time in the week by N58 billion on Wednesday.Consequently, market capitalisation fell by 0.19 per cent from N6.760 trillion recorded on Wednesday to N6.747 trillion, while the All-share index dipped by 40.9 basis points or 0.19 per cent, from 21,199.16 to 21,158.25Further review of the market activity in the day showed that while 20 stocks depreciated in price, 21 constituted the gainers chart.Berger Paint Nigeria Plc emerged the highest price loser, shedding 4.99 per cent to close at N8.94 per share, while Chemical and Allied Product Plc followed dipping 4.98 per cent to close at N24.23 per share. Neimeth Plc, UAC Properties Plc and Dangote FlourMills Plc depreciated 4.96, 4.96 and 4.94 per cent to close at N1.15, N16.49 and N6.16 per share.However, Roads Nigeria Plc led others on the gainers table with 4.82 per cent, to close at N3.48 per share, followed by Transcorp Plc with 4.82 per cent fall, to close at N0.87 per share.In all, 174.4 million shares, worth N1.5 billion were exchanged in 3,765 deals by investors.Transactions on Friday closed on a further downward slide, as the twin market indicators of market capitalisation and All-Share Index fell by 0.2 per cent each.
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