Nigeria Content Online

A finance expert has expressed concern over the current weak
trading being experienced at the Nigerian Stock Exchange (NSE).

Although the NSE market capitalisation on Tuesday appreciated by
N5 billion or 0.10 percent to close at N5.495 trillion from Monday’s figure of
N5.490 trillion, the Exchange has lost over N451 billion since trading started
this month.

Olufemi Awoyemi, managing director and chief executive officer
of Proshare Nigeria Limited, an investment advisory firm, said the downturn in
the Nigerian capital market was not about the intervention by the Securities
and Exchange Commission (SEC), as claimed by some operators.

Mr. Awoyemi said the downturn in the market was also less about
the recent actions of the interim administrator, Emmanuel Ikazoboh, “but much
more about the collective inertia of the market to forward warnings on intended
action by the regulator.”

Volatile market

He said the market will continue to be volatile and chaotic. “It
will be volatile because it is tied to the economy’s rate of change, which is
extremely fast, with explosive upsurges and sudden downturns,” he said, adding
that the market will be “chaotic because it mimics the direction of the
economy’s changes.”

Mr. Awoyemi added that the nation is not sure exactly where it
is headed, but it is swinging between the various alternatives at a very high
speed.

“To cope with an unpredictable and increasingly regulatory
relevant economy, investors and organisations must build an enormous amount of
flexibility into their operations and outlook; rebuild their approach to the
market to one that is premised on their ability/capability to predict the
future,” he said.

He also said that market operators should track trends and policy thinking,
as well as build capacity internally for growth in order to take advantage of
the current change, and convert risks into opportunities.