As investors continue to keep a close eye on the ongoing volatility on the Nigerian stock market following the global effects of coronavirus (Covid-19), Association of Securities Dealing Houses of Nigeria (ASHON) has assured the investing public that the market would soon bounce back.
Although ASHON acknowledged the high level of downswing on the market in the last couple of days, it stated that fundamentals of the quoted companies remained strong.
Responding to media enquiries, ASHON’s Chairman, Oyinyechukwu Ezeagu explained that Nigeria’s stock market remained part of the global exchanges and as such any development in the global market would impact on its operations.
“The effect of the coronavirus is gradually affecting trading all over the world and whatever happens elsewhere reflects in our market. The centre of it all is China and being a major world power both in productive and consumption capacities, any ill wind affecting China would naturally cause a big sneezing to the rest of world. Investors should not panic. The share prices will bounce back. The companies’ fundamentals remain strong. Many investors are taking advantage of the bearish run to beef up their portfolios”, said Ezeagu.
Commenting on why the market had in the early part of the first quarter enjoyed rally only to be moderated by prolonged bearish trend, Ezeagu said : “There were a lot of positive policy pronouncement which influenced investors’ perception, hence the rally. These are attributable to the policy of the Central Bank of Nigeria (CBN ) on Open Market Operation (OMO) Bills, the new national budget cycle , the expectations of members on the outcome of the demutualisation of The Nigerian Stock Exchange (NSE) and generally the traditional optimism following a new year which was our own January effect.
“The sector of the economy that has been so resilient has been agriculture which has always been part of our daily lives in which we have a long value chain and levels of participation. These offer a wide range of opportunities for medium to large scale enterprises.”
Ezeagu spoke on the new development on demutualisation project saying the scheme‘s document has a timetable attached to it. According to him. as the Court Ordered Meeting and the Extraordinary General Meeting had been successfully held, there would be handling of other documentations with the Corporate Affairs Commission.
“ASHON has contributed immensely to the discussion and the actualization of the demutualization project in terms of collaborating with the NSE and in protecting the interest of her members. Specifically, we were involved in the joint public hearing of the National Assembly for a bill for the demutualization of the Nigerian Stock Exchange, the review of members’ data base, identification and categorization of members of the Exchange, determination of closure date of members’ register and agreement of sharing ratio between and within the members of the NSE.
“Furthermore, I, as the Chairman of ASHON was given the singular privilege and honour to propose the motion at the Court -Ordered Meeting to approve the resolution for the demutualization of the Nigerian Stock Exchange on the 3rd of March 2020 at the Civic Centre Ozumba Mbadiwe Road, Victoria Island, Lagos while the motion was seconded by Aliko Mohammed.
“We are currently basking in the euphoria of the benefits of demutualisation but we are not unmindful of the challenges which a demutualised NSE will pose by the expansion in what the Exchange can do and the responsibilities of the change of status from being members to shareholders. Our members need to smell the coffee and brace up to these challenges. We need to encourage our members to live up to the expectations of a demutualised NSE, they should be abreast with their roles as shareholders and move in tandem with the goals of the Nigerian Exchange Group Plc.”
