Stockbrokers Re-assure Investors on Health of Capital Market
Some market operators Wednesday reassured investors that the Nigerian Stock Exchange (NSE) still posses the capacity to meet their medium-term and longterm investments. They operators told newsmen in separate interviews in Lagos that the recent huge capital losses in the market was healthy and natural development.

According to them, the recent poor performance of equities at the exchange is not in anyway a threat to its existence or an indication of market crash, but a reflection of the collective efforts and commitment of all to grow the country's economy.

Mr Samuel Olayemi, Managing Director, Mainland Trust Ltd, the development was a challenge to the character of the nation's capital market and that "it will make investors to appreciate the dynamics and fundamentals that propel the market". "What actually happened can be described as circumstancial, because most investors and some operators misinterpreted the rationale behind most banks demand for their huge capital in the market.

"The poor interpretation of the market dynamics led to a bandwagon dumping of shares and the attendant share glut and huge price losses," Olayemi said. He urged investors to reappraise the market trend, stressing that "the position of the market now in terms of pricing remains the best period to enter".

In his contribution, the former President of the Chartered Institute of Stockbrokers (CIS), Mr Dipo Aina, said that the Nigerian capital market ``remains healthy in spite of the more than 10 weeks of huge price losses''.

Aina, who is the Managing Director of Signet Securities and Investments Ltd., explained that the Nigerian capital market was not under any threat of crash. Rather, he said that the market was undergoing critical market corrections that would put it in a good stead to serve the country's economy better. "The market fundamentals, judging from the performance of listed companies across the sectors are promising and remain the drivers of the market," he said.

Aina corroborated Olayemi's position that the recent annual operational reports of First Bank, Access Bank and the third quarter results of Oceanic Bank Plc, Skye Bank Plc and UBA Plc attested to the solid fundamentals moderating the capital market silently. First Bank Plc in its annual report to March, 2008 proposed a dividend of N1.20 per share and bonus issue of one new share for every four shares already held.

Access Bank Plc also in its audited accounts for the year ended March 31, said that its gross earnings appreciated by 108 per cent while profit after tax grew from N6.08 billion in 2007 to N15.85 billion in 2008. Access Bank in the audited report sent to NSE is equally proposing a dividend of 65k per share. On the other hand, Oceanic Bank Plc, Skye Bank Plc and UBA Plc in their unaudited third quarter results for the period ended March 31, 2008 announced significant growth in their operations.

Kingsley Amajiri, P-H


 
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