Retail shareholders should take advantage of market growth -Stakeholders

Cross section of stakeholders in the Nigerian capital market have cautioned against unfounded statements by uninformed retail investors some of whom have called for caution on prevailing market growth.

Cross section of stakeholders who spoke to Daily Times urged retail investors to take advantage of current market growth and have returns on their investment, reinforcing that market has the tradition of up and down equity price movement, which benefits different categories of investors.

Daily Times Nigeria recall that the national coordinator of the Independent Shareholders Association of Nigeria (ISAN), recently cautioned against bubble in the equities market.

However, cross section of capital market stakeholders maintained that, instead of raising eyebrow on market steady growth, retail investors were urged to take advantage of prevailing market growth and benefit from equity price rise by taking in profit, against the traditional stand of sitting by the fence and complain.

A stock broker speaking on condition of anonymity said ‘ if equity price rises , it benefits some investors who are bent on profit taking, also if equity prices declines, it also benefits some category of investors that want to boost their holdings, so whichever way equity price moves to, it certainly benefits investors” the broker said.

Also reacting to the prevailing market bullish trend, Mr. Donald Kugbe, a Lagos state stock broker told Daily Times Nigeria that the bubble alarm raised by the national president of the Independent Shareholders Association of Nigeria (ISAN), may scare retail investors from the market instead of strengthening them to take advantage of earning opportunities prevailing in the bourse.

Kugbe said ‘that is not correct, because Nigeria is not alone in positive equities performance prevailing globally. We are number three last year in equities performance ranking globally and all over the world equities market are doing very well, so the growth trajectory is always there for our market and other performing markets across the globe and people who understands this take advantage of the opportunities the market provided”

According to Kugbe, the Nigerian Stock exchange is not doing badly, and as the third best performing market in 2017, the trend has continued in 2018 and may further lead to a better performance, a trend he wants retail investors to understand appreciate.

Explaining why the Nigerian market has remained bullish, Kugbe said that understanding the fact that Nigeria came out of recession in 2017, reinforced investors’ confidence in the nation’s bourse. “When economy is coming out of recession the growth pace will be high because of renewed confidence as more investors try to reinforce their position in the market.

He added: “Second, we are expecting full year result of many companies and the market is gearing towards that.”

The stock broker stressed that, what might look like a bubble in equity price movement should be looked at from the economy point of view and devalued currency which has reduced the worth of the Naira even trading at ‘assumed” high price.

“You might think that the market is going up, but you have to know that because the naira has been devalued, the N50 naira of today is not the same of yesterday, so when you see a company trading at N50.00, it is as good as trading at 10 or N15.00 before devaluation of the Naira. So, the market is just adjusting to the realities of the macro economy.

 Stories: Bonny Amadi