This, according to the bank would ensure investors remain appropriate in view of the current market conditions as the bearish trends persistThe bank had also reaffirmed its conviction that a number of stocks are being valued at a price lower than their intrinsic, noting that the present market situation offers medium to long term discerning investors the opportunity to buy under priced stocks with good fundamentals.
The bank’s monthly economic snapshot produced by the strategic planning and research group had recommended that investors should diversify their risk exposure by selecting a mix of investment that includes stock, bond and money market; better still mutual funds investment.
The granting of forbearance to commercial banks by the Central Bank of Nigeria (CBN) to reschedule loans given for market speculation, the bank noted will give respite to many market operators and thereby gradually restore confidence.Â
“We believe the recent rule on market makers by the Security and Exchange Commission (SEC) might rejuvenate the ailing market conditions by achieving the following objectives: add to the liquidity and depth of the market by taking a short or long position, thus effectively diversifying market risk to the investor by assuming some of it.â€
Amongst other impacts, the bank believed that, the recent rule on market makers will facilitate and develop the capacity to lend and borrow designated securities at any time, so as to enhance stock liquidity and long-term growth; stabilise the market by ensuring continuous liquidity, by synchronising buy and sell transactions.
The bank believes that one of the challenges that is yet to unfold is whether the Nigerian market is matured enough for the kind of sophisticated practice expected of market makers as well as the dearth of skills required.
The continued silence in market performance “has been due to the cumulative effects of many international investors who invested on the Nigerian Stock Exchange (NSE) and offloaded their holdings apparently because of the need to meet their obligations somewhere else brought about by the effect of global financial crises.â€





