Kayode Ekundayo
30 June 2009
Lagos — Trading activities on the Floor of the Nigerian Stock Exchange (NSE) last week recorded a major bearish trend with a total loss of N706.21 billion, about 6.9 percentdrop against the previous week of N6.59 trillion.
The market had opened with N6.59 trillion market capitalisation but by Friday, it ended with N5.88trillion. All Share Index, a major indicator of the market dropped by 10.7 per cent.
The sudden drop in the market appreciation was attributed to recent interview granted by the new Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi over his decision to audit banks' books to ascertain their level of exposures on margin loans in the nation's stock market.
Some of the stock brokers who spoke to Daily Trust believed that the statement and action of the CBN has created uncertainty in the market and it may go on like this over a period of time.
According to Frank Ogiamien, stockbroker with Partnership venture group, the statement has brought uncertainty into the market and this, he said has made banks to begin to take their profit.
CBN had last week gave banks and discounts houses till last week Friday to submit details of their transactions with oil companies and also reminded them of the common year end December 2009
"This will definitely create panic in the market since the banks constituted 70 per cent of activities in the market. But there is nothing to worry about", he said Ogiamen said the osilation would continue until confidence is restored back into the market.
Also, Otsu Greg, Managing Director of Mact Securities said the downward trend that resurfaced in the stock market was due to investors' skepticism about the policies that the new CBN governor will come up with. He also explained that banks that have June as their year-end and others that have it as their quarter end decided to sell to pull in their funds so as to balance their accounts.
Kasimu Kurfi is the managing director of APT Securities and Funds Limited. According to him, the statement by the CBN governor has affected the market generally because investors are trying to offload their stocks to avoid further losses.
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