Nigeria Content Online

Some operators at
the nation’s capital market have said that while the Nigerian Stock
Exchange management is planning to attract more foreign investors
through trading hour extension, it should place more priority at
protecting indigenous investors.

Emmanuel Ikazoboh,
interim administrator of the NSE, had on Monday, during a media
briefing on the 2010 market performance, said as a result of trading
extension last December, “we have an increase in the number of deals by
five per cent, an increase in traded volume by 15.6 per cent and
increase in traded value by 34.8 per cent. This justifies that we
should continue with our extended trading hours. It also shows that our
foreign investors have actually started trading and increase the volume
of our operation.” Meanwhile, David Amaechi, an executive member of the
Shareholders Association of Nigeria, said the trading extension was a
setback last year.

Mr Amaechi said,
“We should not forget that these same foreign investors that the NSE
wants to attract to the market were the ones who pulled out their funds
leaving our market to crash. These investors will take their monies
back sooner or later when they make good appreciation. But no attention
or protection is given to us who plan to stay longer in the market.”

Investors’ confidence

Tunde
Oladapo-Dixon, chief executive officer, StockPicks Consulting, a
stockbroking firm, said though it is good for the nation to have a
foreign direct investment for some capital projects, “but the capital
market authority should be encouraging indigenous investors who will
not take their monies out in a long time because the market actually is
a long time investment.” Mr Oladapo-Dixon said there is still fear that
investors’ confidence is yet to be guarded jealously in the market.

Also, analysts at
Proshare Nigeria, an investment advisory firm, said based on some
evaluations it is deductible that the initiative of trading extension
“may in the long run create a pull factor for an improvement in the
market; but for now, the extended trading hours is yet to deliver on
expectations.” They added that “the liquidity posture is yet to improve
as it closed indecisive when compared with previous period’s position.”

Harsh operating environment

In the meantime, Mr
Ikazoboh, in his appraisal of the market last year, said the harsh
operating environment led to mixed performance by listed companies as
shown in their interim and final financial reports last year.
“Declining incomes and savings attributed to rising unemployment,
weakened purchasing power arising from inflationary pressure and
investors’ apathy caused a decline in the participation of Nigerians in
the stock market,” he said.

He said the rise in interest rates especially during the fourth
quarter, profit taking and absence of margin facility exerted downward
pressure on the stock market. He added that the huge margin loans
contributed to the lull in the capital market as banks withheld funding
acquisition of equities by investors.