The Chairman of Association of Securities Dealing Houses of Nigeria (ASHON), Chief Oyinyechukwu Ezeagu, has said investors should take advantage of the current bear market to beef up their portfolios. The market has dipped by over within four days following global effects of Coronavirus and slump in crude oil prices. Some investors have hit the panic button and dumping shares.
However, Ezeagu said rather than panic, investors should take advantage of the bearish trend to increase their investments in stocks, noting that the market would soon stabilize and 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, 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.
Meanwhile, the market dipped further as the NSE All-Share Index fell by 3.7 per cent to close at 22,695.88, while market capitalisation shed N457 billion to be at N11.8 trillion.
Activity level also declined as volume and value traded fell 23.9 per cent and 44.4 per cent to 1.1 billion shares units and N9.8 billion respectively. The most actively traded stocks by volume were Zenith Bank (433.2 million shares), UBA (371.3 million shares) and GTBank (62.2 million shares).