By Peter Egwuatu
Following the persistent downside of the stock market in recent times, stockbrokers have cautioned investors on panic selling of their shares, saying that projections cannot be made under the present circumstances.
The General Secretary of Association of Issuing Houses of Nigeria, ASHON, Mr Sam Onukwue, in his comment on the free fall of share prices said: “Our market is bleeding; Foreign Portfolio Investors, FPIs, and their indigenous counterparts have embarked on massive sell down of shares and other financial instruments with attendant effect of gross erosion of values despite stellar performances of many listed securities.
For instance, the Nigerian Stock Exchange’s All Share Index has been sliding since the beginning of the year, returning negative year-to-date performance of 8.88 percent as at Friday, August 31, 2018. Innocent investors watch helplessly as their investments are plundered by the bearish market exacerbated by prevailing uncertainties in the polity created by the political class.”
He further said: “It has been proven that there is a correlation between the development of the capital market and economic growth and development of any country. As stockbrokers, trained to create wealth and manage investments, we hasten to say that projections cannot be made under the prevailing atmosphere of systemic risk. Consequently, this increases the country’s risk profile while investment decision is obviously threatened. This explains why investors are panicky.”
Continuing he said: “ As the current worrisome operating environment that characterizes our financial markets deepens, we appeal to the political class to moderate their activities and utterances by acting in such a manner as will engender investors’ confidence in the Nigerian economy and by implication our capital market. This becomes compelling as we approach general elections next year.
We wish to express our appreciation to numerous investors in our markets for their resilience and confidence in the Nigerian economy and urge them not to panic. We are confident that the on-going downswing in the securities markets will be short -lived as our market fundamentals remain strong. Shares of many listed companies are undervalued, selling below their intrinsic values. There can be no better time to beef up portfolios in anticipation of superior Return On Investment (ROI).”