The market capitalisation of the listed equities on the Nigerian Stock Exchange recorded a loss of N2.3tn in the last 10 months in what analysts have likened to what happened in 2008 at the onset of the global meltdown,.The market capitalisation, which reached a peak of N8.885tn on January 25, 2011, began a steady decline from that period and closed at N6.627tn on the last trading day of October.This translates into a decline of N2.3tn or 25 per cent of investors holding in the equities market.Market capitalisation is the value of all the shares listed on the Exchange. It is obtained by multiplying the share price of each company by the total number of shares on issue to provide the total value for all the listed shares.Similarly, the NSE All-Share Index is the average point derived from calculating the current market prices of the traded shares on the Exchange.At the end of 2008, the market capitalisation had suffered the highest fall in its 48-year history, shedding 45 per cent or over N5tn to close at N6.8tn.In 2009, due to the Central Bank of Nigerias clampdown on some banks as a result of gross misconduct, the market capitalisation went down to N4.989tn, while the NSE All-Share Index fell to 20,838.90 points.However, on the news of the purchase of the toxic assets of some banks by the Asset Management Corporation of Nigeria, the index increased by 18.5 per cent to close at 27,770.52 points, while the market capitalisation rose to N7.91tn as at the end of 2010.But, after Januarys peak, a lot of instability was recorded in the market, brought about by local and global challenges, which experts said contributed to the declining fortunes of the Nigerian stock market.Stakeholders have been calling on the regulators to ensure that everything is done to revamp activities in the market.According to analysts, the 3.2 per cent marginal increase recorded in the last week of October may not be sustained as speculative investors may try to take advantage of the light rise.They added that it was important for the regulators to take urgent steps to revive the market.For instance, stockbrokers under the aegis of the Association of Stockbroking Houses of Nigeria have called on the government to act fast and save the NSE from the unbridled decline.Specifically, the association said it was important for the Federal Government and other relevant bodies to look into ways by which activities in the equities segment of the NSE could be boosted.The President, ASHON, Mr. Rasheed Yusuf, who spoke at an event last month, said, There is the need to draw attention of the government and policy makers to the situation in the market; the market is currently not performing well and this is as a result of the dwindling economy, and so, government should be informed of the need to put the capital market back on track.There is, therefore, the need for the government to take urgent steps to fix the economy so as to ensure the growth of the capital market.A financial consultant, who did not want to be quoted, said that it was important for the market regulators to look into the issue of market makers more seriously.He added that there should be some sort of intervention or bail-out in the capital market, as was obtainable in the banking and industrial sectors.In apparent reaction to the dwindling share prices on the NSE, quoted companies have also called on the market regulators to save the market from the persistent losses being recorded this year.The Managing Director, Flour Mills of Nigeria Plc, Mr. Emmanuel Ukpabi, who spoke recently, said the NSE had a lot of work to do to ensure that investors returned to the market.He said, It is alarming to note that most shares on the NSEs daily official list are currently selling far below their real value, and this is as a result of the continuous losses recorded in the market since the beginning of the year. However, what some investors may not know is that this is actually the right time to make some informed investment decisions.Therefore, what I would suggest is that the market regulators such as the NSE and the Securities and Exchange Commission do all they can to restore investor-confidence in the market. They have a monumental challenge to ensure that the dwindling confidence in the market is restored.The Director-General, SEC, Ms. Arunma Oteh, said on Monday that new products were to be introduced into the market by the NSE, adding that this would go a long way to improving the liquidity status of the Exchange.
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