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Stockmarket Crisis - Is This The End Or Will There Be More Recession?

Hi Everyone is this the end of the downward trend or are we going to experience more reccesion just look at the market state and what do you think?

The Nigerian equities market continued on its downward trend today for the second trading day in the week; causing the market to depreciate by 355 basis points. At the end of today’s trading session, the ratio of advancers to decliners was 0:66; the ASI lost 1,477.24 points to close at 40,162.91, whilst the market capitalization decreased by US$2.78billion to close at US$75.56 billion. Universal Insurance Plc lifted activities in Insurance sector and market in general as the stock accounted for 43.08% of total market volume, though more than 95% of this volume was block trades.

The circuit breaker of 1% downward limit was today removed by the Nigerian Stock Exchange and replaced with 5% downward limit. In spite of this regulatory action, the doldrums in the market was still pervasive as most of the stocks in the Banking and several other sectors experienced intensive selling pressure, with a greater number of them closing lower. In addition, no gainer was recorded today compared to sixty six (66) stocks that closed on offer and lost maximum 5%.

Activities in the market today suggest loss of investors’ confidence as well as illiquidity and this was corroborated by the surge in the volume of net offer. While the removal of the 1% limit down circuit breaker is a very much welcome development, the level of over-hang in the market still remains elusive. Barring any intervention in the market, we expect the downward trend to continue in the days ahead until the current over-hang is cleared.

Index was down by 355 basis pts on 4,383 trades. Average size of trade was US$2,416 with total value of US$10.59 m. Market cap closed at US$75.56 billion.

Overall, there were no gainer and 66 losers and 60 unchanged. The Insurance Sector led the volume chart followed by the Banking sector and both accounted for 63.77% of total volume traded.

Universal Insurance traded 96.243 million shares to top the overall volume chart. Other stocks that closed in the top echelon were Transcorp, UBA, Spring Bank and First Bank.

* Net Bid: Spring Bank

* Net Offer: Investment and Allied Insurance, FCMB, Fidelity Bank, Lasaco and Access Bank.

* Top Gainers: Nil.

* Top Losers: Air Services Plc, Oceanic, Platinum, BOC GAS and Con Oil

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5 answers

Nice contribution Ibime , i would like to contact you via email in future.

I can also say that the NSE also seems to have bottom out or presently hovering around bottom and support span that was replicated overa five month span about two years back. It may never get as worst as we had it in Q3 and we could record a significantly rise next yr.

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@ Ibime are you saying in essence that this is the best time to enter the market as a smart investor?

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I don't know about NSE but as for Western stocks, we have hit the bottom. We will stay at this bottom for the next couple of months and then the market will rise again. Take my word for it: the financial crisis is over. Stocks are very cheap. The financial market wasn't overvalued to begin with, unlike the tech boom so share prices are very low. Earnings are down, but they will pick up. Even if earnings do not reach pre-2007 levels, shareprices are still undervalued at the present moment. This crisis started with Financial stocks and then consumer cyclicals and financial stocks and consumer cyclicals will lead the uptrend recovery. Now is the time to buy. You can buy in 2 months if you have no capital now, it's still all good. We are going to remain between 8,000 and 9,500 on the DOW for the next 2 months.

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I believe it has a domino effect on everyone because, the stock market situation is not just for the companies listed alone and it shareholders but it goes a long way to reflect the economic situation of a companu which mrans even though you do not have money in the bank you will be part of a reccesive economy where the cost of living would be relatively high.

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Lately everyone is worried about the stock market but I'm curious about how this affects low income people? I don't have stocks, and I don't have money in a bank, so how will this affect me if things get worse with the stock market.

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