NSE has the capacity to close in one digit positive territory — Okumagba

The equities market, which is currently bearish, has the capacity to rebound and close in one digit territory.

The President of the Chartered Institute of Stockbrockers (CIS), Herbert Okumagba, said this during an exclusive interview with Nigerian Tribune.

“The market is presently bearish but with capacity to rebound and close in one digit positive territory at the end of the quarter,” he said.

A peep at the weekly report for the week ended December 5, 2014 shows that All-share index (ASI) of Nigerian equities and market capitalisation on Friday went down 3.81 per cent to close at 33,228.29 and N10.970 trillion respectively.

Also, all the indices edged lower during the week with exception of the NSE Insurance index that climbed up 5.82 per cent inspired by the AXA 77 per cent acquisition in the shares of Mansard Insurance Plc. Similarly, the NSE ASeM index closed flat.

Okumagba noted that investors should be more concerned with the reason behind the bearish trend, which he said is not tied around the performance of the capital market.

“An answer to this question should be approached from first having a good understanding of the causes of present state of the market. Some of the reasons for the bearish state of the market are economic risk borne out of the reducing international oil price and building political risk surrounding the impending general elections which are all likely to make foreign investors averse to investing in the country. And given the percentage of foreign participation in the Nigerian market, their withdrawal is largely felt by the market.

“However, since the reasons are not tied around the performance of the listed companies and the continuous attractive opportunities that the Nigerian market presents, the market has the possibility of returning a positive return in the fourth quarter of 2014,” he said

He, however, advised investors to take position in the market now that the stocks are down. “Investors should take position at the demand territory of the market to benefits upon rebound of the market. There is always opportunity to make money either when the market is up or down,” he continued.

Source : Tribune

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