43% still willing to invest in the Nigerian capital market
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Posted by Felix Okoli on May 25, 2010 at 01:31:47:
Based on our poll on Would you invest in the Nigerian stock market again?, only about 43% of possible investors are still willing to invest in the Nigerian stock market despite it's near crumble due to losses on stock exchanges across the world. Nigeria's stock market witnessed losses as prices of stocks continued falling over a 2- 3 year period entering 2010. Prices of once profitable stocks have fallen by more than 80% but not necessarily below their par value. Only very few stocks in banking sector were protected from this either due to sustained investor confidence or unwillingness of shareholders to sell despite the falling stock prices.
Normally, one would have thought that many stock market investors would not have anything to do with the stock market now due to the blatant instability, but for those who have suffered huge losses, they would be probably wishing that they sold earlier and divested to other better yielding businesses like property or small scale business.
Although stock prices have fallen so low in Nigeria's stock market, this is probably the best time to buy and not sell but the problem now lies on Liquidity and banks are being scrutinized by the CBN for granting loans to stock market speculators. The other thing slowing down the stock market from recovery is the fact that banks have been told by CBN not to accept share certificates or stock investments as collateral for now. My question then is, "What would be acceptable as a collateral for a bank?".
The stock market would probably recover but it may not be as profitable as before
Comments:
Based on our poll on Would you invest in the Nigerian stock market again?, only about 43% of possible investors are still willing to invest in the Nigerian stock market despite it's near crumble due to losses on stock exchanges across the world. Nigeria's stock market witnessed losses as prices of stocks continued falling over a 2- 3 year period entering 2010. Prices of once profitable stocks have fallen by more than 80% but not necessarily below their par value. Only very few stocks in banking sector were protected from this either due to sustained investor confidence or unwillingness of shareholders to sell despite the falling stock prices.
Normally, one would have thought that many stock market investors would not have anything to do with the stock market now due to the blatant instability, but for those who have suffered huge losses, they would be probably wishing that they sold earlier and divested to other better yielding businesses like property or small scale business.
Although stock prices have fallen so low in Nigeria's stock market, this is probably the best time to buy and not sell but the problem now lies on Liquidity and banks are being scrutinized by the CBN for granting loans to stock market speculators. The other thing slowing down the stock market from recovery is the fact that banks have been told by CBN not to accept share certificates or stock investments as collateral for now. My question then is, "What would be acceptable as a collateral for a bank?".
The stock market would probably recover but it may not be as profitable as before
Comments: