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Stakeholders reiterate peaceful polls as key to market rebound

Pedestrians pass street traders in the business district of Lagos. PHOTO: George Osodi/Bloomberg

Indices surge by N294 billion in five trading days
To sustain the gradual rebound witnessed in the stock market in the past few days, capital market experts have urged the Federal Government to ensure that the forth-coming election is credible, free and fair.

The stakeholders, who maintained that free and fair election is critical to market growth, explained that it would boost investors’ confidence, spur market activities and increase investment yields.

Already, political intrigues so far, have taken severe toll on the stock market, causing investors to lose over N3.43 trillion within nine months of persistent decline.

Surprisingly, contrary to the usual downtrend ahead of election, the stock market witnessed increased bargain hunting for blue chip stocks last week.

The persistent bull run for the five trading sessions last week, buoyed transactions in the equity market as investors’ wealth soared significantly by N294 billion in five trading days.

Precisely, the market capitalisation, which reopened at N11.464 trillion on Monday, increased by N294 billion or 2.5 per cent to N11.758 trillion on Friday, while the All-Share Index rose by 784.87 points to 31,529.92 from 30,745.05.

The increased bargain hunting, may, however be attributed to expectations of positive earnings reporting season and big expectations from banking stocks due to the sector’s upward trend in dividend yield.

But stakeholders believed that only peaceful election could restore confidence in the market, sustain the uptrend and spur the expected recovery post-election.

The Head, Research and Investments, FSL Securities Limited, Victor Chiazor, said: “Once we can achieve a peaceful election, the market would quickly stabilise and we would see more inflow towards the equities market.

“Having recorded increased outflows in foreign portfolio participation as reported by the Nigerian Stock Exchange from January to November 2018, I expect a peaceful outcome to reverse that trend and new inflows to aid in driving the market higher.”

The President of Proactive Shareholders Association, Taiwo Oderinde, said: “If Nigeria can achieve peaceful polls, there will be more foreign Investors in our market and market capitalisation will rebound tremendously.

“Again, there would be more employment opportunities for our teeming youths, all the stakeholders will benefit from a robust market activities, more companies will be paying bumper dividends and on the long run, the economy will grow on a sustainable basis.”

An independent investor, Amaechi Egbo, said the market is information-driven, warning that any crisis erupting from the election would trigger severe panic in the market.

“Any crisis from the election would have a multiplier effect. The hiccups in the both the political system and the economic system are always severe and the after effect is always on the market, but peaceful polls would stage a comeback of both foreign and local investors to the market and stimulate activities,” he said.

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