Bears may be just one step away from staging a devastating return. This time, no because the bulls have ever reign for long but that they have been lurking for a chance to scare investors further at the Nigerian Bourse.
The current trading pattern shows the stock market is defy fundamentals.
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Ahead of the first- half ( H1) earnings season, many investors are not keenly betting on stocks that are known for records of interim dividends.
This trend shows the chance fast approaches for the bears than ever expected and signposts the need for catalysts to spur positive market returns.
If the positives do not happen soon as against a sustained negative trade, it would give the bears more opportunity to consolidate position.
“We believe that the bearish run would persist as investors maintain a risk- off approach towards investing in the domestic equities market. Nonetheless, we do not rule out the possibility of bargain hunting due to sharp losses recorded recently,” Afrinvest Research analysts said in their July 15 note to investors.
In the trading week ended July 12, the NSE All-share Index depreciated by 2.41 percent while the market capitalisation appreciated by 7.91 percent to close the week at 28,566.79 and N13.922 trillion respectively.
“Our outlook for equities in the short to medium term remains conservative”, according to Lagos based Cordros analysts in their July 15 note.
The Nigerian Stock Exchange (NSE) All Share Index (ASI) has lost approximately -10 percent of its year open position, a clear indication that investors have shifted far away from equities.
A “bear market” is when stocks see a 20 percent decline or more from a recent high — but they are also marked by overall pessimism on Custom Street. The Nigerian equities market kick-started this week on a bearish note and analysts do not see a sudden reversal of this trend with.
“As second quarter earnings results begin to trickle in, we expect to see increased activity on the exchange in no particular direction. However, we expect results to be mixed and as such expect the ASI to respond in like manner,” said market analysts at Vetiva Securities in their July 15 note.
They however noted that in the absence of any other market catalysts to drive the bourse they foresee losses persisting.
The Securities and Exchange Commission ( SEC) has commenced the verification exercise for no fewer than 4,160 people who ‘invested’ their monies with Kano-based Dantata Success and Profitable Company.
The company has been involved in unlawful solicitation of funds from the public with a promise of inexplicably high returns to investors.
SEC issued a July 15 circular to the investing public sequel to the appointment of joint Administrators/ Trustees for Dantata Success and Profitable Company (DSPC) by the Commission pursuant to sections 13 and 173 of the Investment and Securities Act, and consequent upon an ex parte Order granted by the Federal High Court Kano.
Details of the verification timetable showed claims of about 478 unpaid ‘investors’ were verified on July 15, while that of about 780 was carried out on July 16. The daily exercise is from 9 am to 4pm. The venue of the exercise is Mambayya House, Aminu Kano Centre for Democratic Research and Training, Gwmmaja Gidan Mallam, Kano City
The verification of claims for additional 1,272 people is expected to be done from July 17 to 18; while from July 19-20, the exercise will cover 1,630 investors.
“All unpaid DSPC Scheme investors are necessarily advised to attend in person as attendance by proxy is not acceptable. Claimants must bring along the following documentary evidence/information for the verification exercise: All original documents and proof of evidence of investment in the illegal scheme including Bank Teller, Bank Deposit Slip, Bank Online Transfer Advice, Completed DSPC Investment Form, E-mail/whatsapp Correspondence and DSPC Payment Receipt”, the circular reads.
