Some capital market operators on Wednesday attributed the persistent decline in the nation’s bourse to the warehousing of funds for electioneering activities and economic uncertainties in the country.
In separate interviews in Lagos that uncertainties surrounding the 2015 general elections had slowed down interest in the equity market, especially as foreign investors seek other portfolio investment safe havens.
Mallam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said that activities of politicians ahead of the forthcoming primary elections was affecting the entire market growth and development.
Kurfi said that the market was witnessing huge supply of shares with less demand, noting that, some politicians were offloading their shares for electioneering purpose.
He also said that the development in the international market contributed to the lull in the market with foreign investors reducing their exposure in the equities market to minimise losses.
According to him, foreign investors, who are major players in the market are exiting due to crude oil price fluctuation to avoid further devaluation.
Kurfi said that the market needed strong domestic investor participation to ensure sustainable growth and development, noting that, dominance of foreign investors would not help the market.
Emeka Madubuike, President, Association of Stockbroking Houses of Nigeria, said that the market was reacting to various uncertainties in the country.
Madubuike said that political, health and security uncertainties in the country led to investment flight from equities to fixed income securities.
He added that macroeconomic volatility attributed to the market trend, noting that, the effect would be temporary because of strong fundamental of listed equities and impressive price of stocks.
Oscar Onyema, the Chief Executive Officer, Nigerian Stock Exchange (NSE), recently urged investors not to panic over the market trend.
Onyema said that the market was far away from the bear, noting that, the market situation was as a result of the forthcoming general elections and the health sector situation.
He said that the market would found its bearing after the general elections.
The market capitalisation of NSE dropped by N482 billion or 3.55 per cent between Oct. 2 and Oct. 14.
The market capitalisation which closed trading on Oct. 2 at N13.583 trillion lost N482 billion to close trading on Oct. 14 at N13.101 trillion due to price losses.
In the same vein, the All-Share Index during the period under review, dipped by 1454.02 points to close trading on Oct. 14 at 39,681.71 points against 41,135.73 points posted on October 2.
(NAN)
