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The Association of Securities Dealing Houses of Nigeria (ASHON) has cautioned embattled equity investors against panic sale of shares to avert avoidable losses as the stock market would soon bounce back.
This is even as ASHON called investors to get accross to stockbrokers for sound professional advice before taking investment decision.
Responding to media enquiries on the on-going downward swing prompted by massive sell-off on the Nigerian Stock Exchange (NSE) last week, ASHON’s Chairman, Chief Patrick Ezeagu ,described the situation as unnecessary panic sale.
According to him many investors adopt hard instinct whereby they sell off just because others are selling. Ezeagu noted that two investors may not necessarily have the same motive for sell or buy order, saying this is where the need for professional investment advice from stockbrokers become compelling.
He stated that a trend analysis of corporate earnings in recent time indicates that many companies across sectors have posted higher earnings with good returns but this has not significantly reflected in the upward movement of their share prices and explained that there was nothing unusual about this as the market generally reflects the trend in the economy, hence, investors buy into the future of these companies on the expectation of higher shareholder value. Those who are selling off their shares right now are speculators and not real investors. Every stock market needs speculators for liquidity but they can change investment decision in one second. Our stock market is forward looking. Investors need not be nervous. They should consult professional stockbrokers for sound investment decision. There is no basis for panic sale of shares. Many companies have announced strong financial performance with prospects of increased future earnings. Why should a shareholder of such a company embark on panic sale of shares ?
Globally, stock market gauges the mood of the economy like a barometer. Our market is not a local one. Foreign investors have significant stakes because their analysis has always convinced them that our market has potential for strong Return on Investment (ROI). At the moment, core investors are awaiting a couple of things, including announcement of ministers of the Federal Republic and the economic team to show the clear direction of the government.
