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Capital market has capacity to rebound — Okumagba

By BusinessNews Staff on December 14, 2014

The Chartered Institute of Stockbrokers, CIS, has said that the Nigerian stock market, which is presently experiencing decline in equity transactions on the Nigerian Stock Exchange, NSE has the capacity to rebound .

The President, CIS, Mr. Albert Okumagba said “The market is presently bearish but with capacity to rebound and close in one digit positive territory at the end of the quarter.

We should first have a good understanding of the cause(s) 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.

When asked why the institute is becoming more visible under his administration, he said “The secret for the visibility of the Institute is anchored on dynamic and virile leadership now experienced in the institute and enhanced network of relationship by the leadership of the Council of the Institute.

He however, called on investors to 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.

When asked if it was true that the rebasing of the Nigeria’s Gross Domestic Product (GDP) brought into fore the contribution of this industry for the first time, he said “, Yes, we have always known this but the rebasing put monetary value to it even though the figure may not be correct as we do not have the data to generate the accurate figure.

On what should investors look for before they invest in the entertainment industry, he said “This is difficult to say knowing how the industry works. It is not all their work that turns out successful but as in all investment the character or track record of the promoters should guide an investor.

Other things that could be looked at are the size and structure of the market of the products, the level of development of the industry in terms of maturity, the level of competition amongst players, average cost of doing business, industry average revenue/returns and the market share of the artiste being considered as the venue of investment.

[Vanguard]

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