Cautious investment climate at NSETHE investment climate last week at the Nigerian Stock Exchange (NSE) appeared to be relatively steady as the force of demand and supply which is one of the major guiding rules on transaction in the equities market around the globe tilted the market towards the positive position.The stock market is also now going through cautious investment transaction by investors' as the market is beginning to show signs of a market which has reached its resistant level.Most investors due to the daily gains recorded by equities in the week have chosen to stage a come back to the market.The NSE All-Share Index appreciated last week by 170.5 points or 0.85 per cent to close on Friday at 20,373.00 while the market capitalisation of the 191 First -Tier equities increased to N6.496 trillion.Investors' confidence growing The period of September to December in the equities market is usually one mired with large volume sales of shares by investors to celebrate the Moslem and Christian festival.A rough statistics taken among operators in the market (brokerage firms) showed that they have been recording increase in the number of patronage from both new and existing investors in the market.Another x-ray of the market revealed that just like the healthy period prior to 2008 in the market where brokers were seen trading vigorously on the floor of the Exchange while others engaged in high network transactions is gradually creeping back to the equities market.Another factor that seems to have further heightened investors' morale is the acquisition of the rescued banks listed in the market.Shareholders are of the opinion that their investments in the rescued banks are guaranteed when compared to the Bridge banks in the domestic economy.Expected increase in sales of shares/profit taking While the market seems to be gaining investors' confidence by the day, value of equities may be taking a further rise in its prices due to the fact that most stocks prices have bottomed out.However, unit holders in shares are usually expected at this period of the year between September-December to also take profit on their investments to meet demands and more especially during the festive period between December and January of each year.Although transactions in the market will not be all losses all through, permutations by market analysts however suggested that most stocks will experience price depreciation as a result of glut that may hit the market within the festive period.Meanwhile, as a sign post, the market analysts enjoined investors to remain steadfast in their investment drive as the market has gone past its trying days, and coupled with the fact that most stocks prices have bottomed out; the only option left for the market is to return as a safe haven for investment profitability.NSE's moves to reposition the marketWith unwavering commitment to deepen the Market, the Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, has said that the Exchange had identified integrity, durable wealth creation and business development as veritable tool to grow the market.To this end, he said the exchange would soon roll out new products- Options and Derivatives that will be traded on the Exchange, beginning from 2012.Besides, Onyema noted that the management of the Exchange had coopted ten new members to bolster its oversight functions, adding that each inducted council member had subscribed to the code of conduct for council members.He listed the five asset class options to include exchange traded bonds; equity options; index options and derivatives and financial features.He noted that a lot of things needed to be considered for the industry to be ready for the introduction of the new products as the Exchange needs to hire options specialists to drive the products to fruition.Among the top strategies by the Exchange is the reduction in the volume of shares required to effect a change in the price of equity, introduction of market makers and share buy-back.The Exchange is said to be planning to reduce the volume of shares required to move the price of a stock from 50,000 units to10, 000 units.It is believed that when carried out, will create liquidity and impact positively on the share prices of most of the highly capitalised stocks. But this experimentation will begin with large capitalisation firms. Apart from the new price rule, the Exchange is equally considering the classifying of stock broking firms into active and inactive categories. Also, companies would be classified into small, medium and large capitalisation.The Securities and Exchange Commission (SEC) had in 2009 given guidelines on the share buy-back as part of the measures to address the stock market meltdown.Although SEC licensed some market makers, they are yet to commence operations, due to stiff guidelines introduced by the former management of the NSE and the crisis in the banking industry that led to the intervention of the Central Bank of Nigeria (CBN).Market indicators Trading on the NSE continued to nosedive as the market capitalisation further depreciated by N9 billion or 0.13 per cent to close at N6,433 trillion from N6,442 trillion recorded on Friday while the All-Share Index equally dropped by 0.13 per cent or 26.96 basis points to close at 20,175.54 from 20,202.50 index points.Consequently, on the price movement chart, 31 companies depreciated in stocks while eight others gained in value.Oando led the losers table with five per cent, to close at N99.75 per share. UAC-Property followed with five per cent to close at N13.31per share, while Access Bank shed 4.99 per cent to close at N4.95 per share.On the gainers table, Dangote Cement topped the list with five per cent to close at N99.75 per share. Okomu Oil followed with 4.99 per cent to close at N20.39 per share, while Ikeja Hotels added 4.47 per cent to close at N1.87 per share.With transactions exchange in 1,922 deals, the banking subsector fuelled with the activities in the shares of First Bank and Zenith Bank dominated in volume terms with 82.3 million shares worth N601.2 million, while the Commercial Services subsector, strengthened by the activities in the shares of Courtville Business Solution followed with 38.6 million units worth N19.7 million in 25 deals.The Media sub-sector ranked third with 39 million units worth N25.4 million in one deal.On the whole, investors exchanged 208.3 million shares, worth N1.45 billion in 3,469 deals.With huge price losses suffered by major blue chip stocks on Tuesday, equity transactions closed on a downward note, resulting in market capitalisation to shed weight further by N51 billion.Particularly, at the close of trading on Monday, the All-share index fell by 159.91 basis points or 0.7 per cent from 20,175.54 to 20,015.63, while market capitalisation dropped by N15billion from N6, 433trillion to N6, 382trillion.A further review of the price movement chart shows that 54 companies depreciated in price, led by Cadbury with five percent to close at N15.20 per share, followed by Flour Mill with 4.99 per cent to close N65.85.UACN dropped 4.99 per cent to close at N35.22 per share.Oando fell by 4.96 per cent to close at N22.03 per share while UAC Properties lost 4.96 per cent to close at N12.65 per share.The banking subsector remains the most active share in volume terms with 268.4million shares worth N1.57million in 2,457 deals while the insurance subsector trailed with 18.6million units worth N11.imillion in 62 deals.The conglomerates ranked third with 12.6million units worth N130.6million.On the whole, 333.2 million shares worth N2.3billion were exchanged by investors in 4,211deals.Notwithstanding the price losses that outweighed gains, trading activities were positive on Wednesday, resulting in a slight increase in market capitalisation by N5billion.A further review of the days transactions showed that the few price gains recorded by some blue-chip companies was enough to push the market indices.Particularly, the All/share index rose by 14.029 points or 0.07 from 20,015.63 recorded on Tuesday to 20,029.66 while market capitalisation rose by N5billion from N6, 382 trillion to N6, 387trillion.On the price movement chart, 23 companies appreciated in price, led by Roads with 4.97 per cent to close at N4.65 per share while First Bank added 4.94 per cent to close at N8.92 per share.Access Bank gained 4.90 per cent to close at N5.14 per share while NCR gained 4.84 per cent to close at N4.98 per share.Ikeja Hotel, RedStar Express, Ecobank TransNational Incorporated gained 4.59, 4.55 and 4.39 per cent to close at N2.05, N2.30 and N11.65 per share respectively.Conoil gained 4.12 per cent to close at N34.36 per share while Japaul oil added 4.11 per cent to close at N0.76 per share.Transactions on Thursday were again on the upbeat as the twin market indicators, the All-Share Index and market capitalisation appreciated by 0.58 per cent to close at N6.424 trillion and 20,145.24 basis point.A further review of the days activities showed that 25 companies pitched their tent on the gainers table while 16 others constituted the laggard. The market closed on a positive trend on Friday after 27 stocks which are mostly blue chip pitched their tent on the gainers tables while 10 other companies suffered depreciation.The All-Share Index and the market capitalisation closed the day at 20,373.00 basis points and N6.496 trillion from 20,145.24 points and N6.424 trillion respectively.
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