By Peter Egwuatu & Providence Obuh
Operators and stakeholders in the nations’ capital market have expressed solidarity for the President elect, Goodluck Ebele Jonathan, following the successful presidential election conducted recently, stressing that the stock market has started to experience growth in various performance indicators.

Specifically, investors gained over N110 billion or 1.4 per cent  from April 11, 2011 to April 21, 2011. The market capitalisation which represents the value of total investment on the Nigerian Stock Exchange (NSE) increased from N7.883 trillion to close last week Thursday at N7.994 trillion.

In the same vain, another stock market gauge, the All Share Index increased by 344.33 points from 24.675.75 points to close at 25.020.08.

The All Share Index measures the trend of movement of all share prices of quoted companies at the Exchange.
Managing Director, Lambeth Securities Limited, Mr. David Andorin said that the emergence of  Goodluck Jonathan, as President of Nigeria was positively received by the capital market operators, especially by stockbrokers because he was seen as a business friendly leader who will take issues relating to the economy very serious; “ with a strong economy, the capital market will be better for it” he added.

Continuing, he said, “ market operators are looking at the programmes he has on  the Petroleum industry, in terms of Petroleum Industry Bill (PIB),  the power road map as being important policy driver that can change the fortunes of this economy and thus affect the capital market positively.

“We also believe that policies that will drive the economy towards meeting the goals of 2020 and all the recommendations that have been made for various sectors of the economy  will start enjoying official backing.”

Commenting on the state of the stock market pre election, he said, “ The build up to the elections and the resulting election fever affected the market negatively, because investors, both domestic and foreign were holding back their money and been unduly cautious and so demand in the stock market was relatively weak.

“The market has been in a state of dynamic equilibrium, we saw a market that started the year at index of 24,000, climbed to 27,000 and then eventually came down to 24,000 again,  but we are  seeing movement between that 24,000 points and 25,000 points now, indicating that the market is in a state of dynamic equilibrium.

“ The market reacts to price sensitive developments in the environment, either the macro economy or the social political state of the economy. When positive events occur they impact positively on the market and when negative events occur they impact negatively.

So we have seen an environment that has been unstable in the recent past, for instance macro economic liquidity has been unstable at the time when Federal allocations are released we see the market coming up and when Debt Management Office (DMO) and Central Bank of Nigeria (CBN) sells either treasury bills or bonds we see the market coming down. Also, the interest rate dynamics  system , when the inter bank rate climbs up we see the market coming down or when the inter bank rates comes down we see the market bouncing back.

In the political arena when there are uncertainties we see the market reacting negatively and then when positive developments occur like the very credible election so far, the National Assembly and the presidential, we see the market reacting positively, and then when you see irrational violence unleashed on the nation, we see the market reacting negatively, so these are the kinds of dynamics, generally is the nature of a stock market,  is volatile it goes up and down in reacting to price sensitive occurrence within the environment.

Mr. Tunde Oyediran, Managing Director,  Finawel Securities Limited, while commenting on the trend in share movement said, “ordinarily share prices fluctuates, some times it goes up when there is a demand for it, stocks go up when there is a positive sentiments about the stocks in the market, thereby many people wants to buy and then you will see the price going up.

Sometimes the stock also come down when there is a kind of uncertainty: when there is no strong reason for people to buy such stock, that is why you will see the fluctuation up and down in the share price. It is a normal occurrence.  Stocks should not go like a straight line, some times it come down, goes up and come down, that is the normal trend in share price.

While answering question on what has happened in the last one month on the gainers and losers chart, he said, “ we recorded more losses than gains and this has been attributed to election fever. We call it a kind of election fever because most of the politicians that have bought stocks in the market gave instructions that these stocks should be sold to get money for their last minute campaign, and  that is why we recorded more losses during this period.

Commenting on how the election had impacted on the market, Oyediran said, “it has impacted negatively, the stocks went down heavily during that period, just like I said politicians sold  to sponsor their campaigns.

Speaking on the impact of the stock market post presidential election, he said, “ we hope that it will bring back the confidence into the market, because many people before the election were thinking that there will be confusion in the country.

The foreign investors had though that it is not going to go well, and that if  they invest, what will be the situation of their investment, they have seen situations that have happened in the Northern  part of Africa, Lybia and some other places so they were pessimistic  about Nigerian economic situation.  But with the coming in of the President, substantive  President, it will spell good omen for our market and the confidence will be brought back into the market.

In his own submission, Dr. Faruk Umar, Chairman, Advancement for the Rights of Nigerian Shareholders said , “the entire nation must change its attitude for the capital market to develop. Look at Ghana , they had a credible election that puts investments into that country. I am telling you that if we want the capital market to develop, we must have credible election. Foreigners will not invest their money in country that has infractions and in an economy that is not stable.

So I commend President Jonathan for appointing somebody who is credible as the Chairman of INEC, so if the entire election is completed without chaos, then we will begin to see more investments coming into the market . So credible election will attract foreign investments into our country. Those of us who have been in the market often slow down when election comes, because we don’t know what will happen. We are pleading  with our politicians and elders to ensure that they do not bring chaos into this country.

In his response on what will improve confidence in the market, he said, “ integrity and transparency will bring confidence to the market. With a successful election, we would begin to see companies approaching the market to raise funds. The NSE and Securities and Exchange Commission (SEC) will begin to see application for new issues coming from companies to get listed and this will improve capitalization and we will begin to see positive development.”