Shareholders are optimistic that bulls will return to the Nigerian capital market in 2015. Also, expectations are high given that for about seven years now, the insurance sector has not given dividend and bonuses but in this interview with investors’ forum, shareholders reveal that the insurance sector will give out dividend and more dividends will come from other companies.

Unlike the Stock market, Forex trading is Online

By Providence Obuh

Chairman, Nigeria Professional Shareholders Association, Mr. Godwin Anono:

At the first three months of 2014, the market was behaving well, we had the feeling that the shock of 2013 was now getting stabilized and everybody was looking at the market.

Between March, people started having different dimension entirely, when you look at the whole scenario, the retail investors started having a mix feeling, insurgency, government not bringing out money and the oil fall also compounded it again. Then people started panicking, which brought the prices of shares to where they are today. I call it the yoyo period, if you have money buy.

People think there is going to be war in the political terrain in the country and a lot of people started panicking but when that occasion didn’t arise, at the end, people that have money to buy can now buy because from January to March when the terrain changes its phase and the election is over, there is no war, oil glut start stabilizing in price, the market will bounce back again. This is why I call it yoyo period if you have money now go and buy. Imagine that First Bank shares sells for N8.20.

The number of companies that paid dividend in 2013 and 2014 increased compared to 2012. What is happening in the market today, like the drop in price, does not affect the performance of the companies. They are doing well.

Companies that will pay dividend in 2015 are going to be more, like the insurance sector that borrowed money from Dawoo, that is the Dawoo loan. Those companies are trying to settle with Dawoo and Dawoo has extended the facilities given to them and the directors have been telling us that the era of not paying dividend will be overr. So Dawoo has streamlined the loan facility to enable them pay dividend, may be one in three or two years.

The bull will come back and act again in the capital market; capital market is about the ability to have the foresight and taking position. The capital market is going to boomerang after elections, this is the time that is good for our retail investors to buy so that when the foreign investors that went away come back, we will be paying more for the shares. You cannot use short term loan to buy long term, but if you do , your chances of losing is very small hence you are buying at a give away price.

Anytime from now, the market will pick up. We pray there is stability in the country and there should be no war and the oil glut should be over. Once all these happen, the market will bounce back. At the same time, it is a lesson for the federal government, relying solely on oil is very bad. I have been in the market since 1975, we bought Total for 50 kobo, First Bank N1, Guinness N1.50. I have no other job am doing than buying and selling of shares. With my experience, am able to tell you which company will declare dividend .

Things are going to change in the capital market especially as it affects price. Another thing that will grow the market again is when the companies start declaring good dividend in terms of where their prices have slumped, then that will entice retail investors to come back to the market. Regulators need to sit up and do their job because people are no longer interested in the market, there has to be confidence in the market. Example is the issue of regulating the capital base of the Stockbroking houses to bring sanity and drive away dubious stock broking firms.

The stock exchange is doing a very good job, because some of these houses sell shareholders shares and disappear, some even walk the street of Lagos and nothing is happening, these are people that should be arrested and thrown into jail to bring sanity.

Some retirees put all their earnings into stocks and some body will tell you, you don’t have anything again after investing almost all your life earnings. A lot of people have died in the process, when the regulators become hard on the operators everybody will sit up.