(L-R) Ayo Banjo and Awele Maduemezia at the LNG Limited World Press Conference on the Nigeria prize for science and the Nigeria prize for literature in Lagos.

THE belief by a good segment of operators in the Nigerian capital market that the latest intervention by the Securities and Exchange Commission (Sec) will lead to market rebound fell flat as all the indices in the market pointed downwards throughout last week.
BusinessWorld Intelligence can now reveal that since the last eight days following the intervention, the capital market made only one positive outing which was recorded on the first day of the announcement. Since the last seven days beginning from last Monday, the market lost as much as N81 billion which reduced the market capitalization to N6.1 trillion from N6.2 trillion recorded a week earlier. The rate of loss has been consistent each day with widening disparity with the least loss on daily basis put at 0.013 per cent. This is same with the market index which shed weight all through the last seven days in progressive dimension.
In a response to the development, the NSE last week explained that the current downturn in the market is a function of the global meltdown, noting that all the major markets in the world have continued to shed weight since the last two weeks in what it described as seasonal occurrence. However, stockbrokers told BusinessWorld that global holiday trends have never impacted the Nigerian market in the known past.
Stockbrokers who spoke with BusinessWorld on condition of anonymity explained that it has been difficult to convince investors that the market is not in crisis in view of the method adopted in the entire intervention process and hype it attracted from the media. They further explained that since the market is information driven, there in no way investors will not want to watch the situation closely so as not to trade in troubled waters. They further noted that financial sector regulators have not come to terms with the level of sensitivity of the market so as to be adequately guided when actions will be taken. It is their opinion that the sorry state of the Nigerian banking industry is also a factor in the manner reforms in the sector were executed.
Investors also believe that the massive movement of security operatives into the financial sector at any time of change instils fear in them and creates an impression of insecurity. They told BusinessWorld that since the market is driven by the forces of demand and supply, it is likely that money that will flow into the capital market will continue to be minimal until investors become fully aware that their investments are not in serious jeopardy.
Because more people now want to dispose off their shares based on the perceived air of uncertainty in the market, the situation will continue to remain dicey until some of the revelations made by SEC and Alhaji Dangote become fully substantiated to the extent that investors will believe that their investments are safe.