Local investors in the Nigerian capital market have been urged to seek professional counselling from qualified investment experts before venturing into the market for investment purposes.
Failure to seek professional counselling before making inroad in the equities market, in a bullish run could result to loss of investment value and erosion of interests in the wealth creating function of the capital market.
Managing Director/CEO at Cowry Securities Limited, Mrs. Nkoli Edoka, who spoke to Daily Times Nigeria in reaction to questions on the possibility of a prolonged bearish run, heralding the ongoing bullish market, said that the prevailing bullish market was long expected; and therefore did not take any investors by surprise. “Long awaited growth, very good foe the market,” Edoka said.
Analysis of three stock market indices in sub-Saharan Africa (SSA),showed that Nigerian Stock exchange’s (NSE’s) All-Share Index has surged further ahead of both Nairobi (NSE 20) and Johannesburg (all-share).
The NSE has gained 39.6 per cent ytd, compared with 19.8 per cent for Nairobi and 10.5 per cent for Johannesburg Stock Exchange (JSE).
The NSE ASI was still in negative territory ytd as recently as 09th May 2017, but has since climbed, propelled mainly by the response of the offshore portfolio community to the CBN’s new fx window for investors and exporters (NAFEX). The current Q2 reporting season has brought some strong results from non-banks.
However, Cowry Securities CEO said that the market up and down price movement is market’s natural character, hence market sentiment drives equity prices up and down and at every turn, investors take advantage of stock prices to either make money or increase their portfolio.
She added that the best thing to know is when to buy and when to sell.
Edoka said that the current bullish market could not be attributed to any herd movement, but thorough analysis-
driven investing that reflects the huge opportunities in the Nigerian market, which has been beckoning on discerning investors to take advantage of.
“As a local investors you have to seek counselling of experts who have done analysis of the market and the stocks you want to invest in, before investing in the market, otherwise you could be shocked”
While debunking any fear of possible market depression, on the tail of the prevailing bullish run, hence the market is controlled by foreign investors who may decide to dump their shares any time, she said “ it is not possible”
According to her, the market is a free entry and exit business. “I don’t like using the word dump, the right word is exit, and the market permits free entry and free exit.”
She clarified that the foreign investors could be backed by fund managers who may call for their funds at any time and no one could stop them from exiting, and also people have always been ready to enter the market or exit.
“That is the trend of the market, if I want to have liquidity, I may exit at a loss. The domestic investor should do due diligence and analysis very well and know when to exit and when to buy. I don’t want to use the word dump, it is exiting, when the fund manager calls for their fund.”