By Emma Ujah
The Chief Executive Officer, CEO, of the Nigerian Stock Exchange, Mr. Oscar Onyema, has said that opportunities still exist for investors in stocks, in spite of the current downturn in the capital market. He spoke during an interview after the Annual General Meeting, AGM, of the Kano/Kaduna Zonal Branch in Abuja. His words, “It is important for investors to understand that just because the market is going down doesn’t mean there are no opportunities.
So if you look at large cap, small cap and med cap securities; small cap securities have done pretty well, they have returned about 22 percent positive. “Now the whole market is about 15 percent and that is because of the weight of the large cap so it is important to dig deeper and understand the dynamics of the market and if you don’t have time engage a professional to walk you through all of that.”
He admitted a low investor confidence in the market but noted that it should not be a surprise given the fact that the nation’s economy had nosedived.
According to him, “Investor confidence is very low given that the market volatility we have seen and given the down turn in the all share index. Having said that, the market is reflecting the economy. It is a barometer for the economy so it will be surprising if the market is going up when the economy is having shocks.”
The downturn in the market, notwithstanding, the D-G said that the current market situation present fresh opportunities for investors, as according to him, proper professional market analysis could be very helpful in this regard. His words, “It is important for investors to also understand that there have been significant sell-offs between last year and this year and it could present opportunity.
Again it is important to do the analysis, understand where those opportunities are but certainly the opportunities, not only in the equity side but across the various asset classes we always advise investors to diversify their portfolios to have exposure in different assets classes that are not necessarily correlated.”
Mr. Onyema disclosed that the Kano/Kaduna zone recorded more trading outside of Lagos than all the other branch councils in the country in 2014. He however noted that the quantum of trading was much lower than the 2013 recorded, as he described last year as “very difficult,” especially towards the end of the year giving the oil price shocks. He added that the bulk of the trading activities recorded in the branch during the year under review took place in Abuja.
The NSE boss described Nigerian investors as “typically momentous traders,” adding, “If the market is going up you see a lot of people coming out to buy, if the market is going down people stay on the side line selling and that hasn’t changed.”
The exchange, he said have stepped up its sensitization campaign activities and that there were 200 financial literacy programmes throughout the nation last, year. He disclosed that most of the programmes were held in the south and that the security challenges in the North, negatively affected the organisation’s public awareness in that part of the country.