Is the momentum achieved via retail investors' participation in the stock market now paving way for a tide of investing interest in private ventures?

Jide Akintunde
#1

24.06.08

Last year was quite momentous for the Nigerian stock market, recording 74% growth to top all the other markets in the world. Under the prevailing circumstance in the developed financial markets, I think that more investment would be attracted into the Nigerian market, although profit taking or outright divestment is not unlikely, depending on the portfolio objectives of the investors. However, the slide in the market in the last three months makes portfolio re-alignment an option. Actis divestment from UACN is instructive in this regard. But Nigeria remains a huge place of opportunities such that what is taken out of the stock market could easily be put into private ventures. I'm not trying to explain the grip the bear has maintained on the market lately, which continues to make the heart palpitate.

Rasheed Shobande
#2

25.06.08

What has remained a challenge is how to measure the sentiment of investors for participation in family owned businesses seeking an exit strategy through an IPO or sale to an investment boutique. Where is the forum for those seeking exit strategies to meet those who have the investment appetite for nurturing a private business from a family run business to a publicly listed company complete with the right degree of corporate governance and earnings? As a technology consultant I?m constantly seeking new ways of applying technology to enabling productivity and innovation. I?m interested in hearing from companies or individuals interested in exploring technology as an enabler.

Faisal
#3

26.06.08

It s true that the capital market witnessed an unprecendented growth ever in its history in the last 2 yrs but the recent spate of losses calls for great concern. Investments are being eroded without cogent explanations as to what is responsible for these stip decline in share prices. There are private ventures that were capitalizing on the apparent boom of the capital market as observed some months back before this crash but investors must be very careful as some of these private ventures are similar in operations to the wonder banks where careless investors place their funds in anticipation of huge profits. What they got in return was actually huge losses. Any body that wants to invest now in shares, private ventures or whatever invetsment platform available or trading in fx must be very careful, consult very well and be calculative. Investments today is no longer fun. You can lose a life savings.

R Shobande
#4

26.06.08

As a response to Faisal's post, I'm somewhat amazed with the popular misconception amongst Nigerian investors that their investments in shares are expected to remain above the bought valuation. This easily demonstrates either lack of investment sophistication or/and mis-selling on the part of promoters. I believe today's shares promoter has a greater duty to educate investors of their expectations and obtain third party verification of a investors understanding. I recall parallels with the dotcom boom and bust cycle ending circa 2000, where valuations of technology shares went sky-high. The same pathetic noises are being made by retail and professional investors alike for guidance on market sentiment just read a cross section of this month?s Nigerian newspapers. There is an inherent risk that capital inflows will reduce and the dearth of new market participants into the market, not a scenario we are likely to see considering the impact of the oil economy. Serious erosion of market capitalisation remains a possibility and has been muted by several analysts both Nigerian and foreign. I believe, opportunities will exit for shares where fundamentals and cash flow are proven, until the market leaders shares can demonstrate steady and progressive dividends market volatility is here to stay.

Jide
#5

26.06.08

I think the capital market now proves 'cynics' right in terms of how absorptive capacity for what has happened in the last two years is just not there. The regulators have disappointed as they befuddle the the investing public where they should have provided credible insight into the down turn in the market. For instance are we very certain that operators who dont meet the recap requirement will be out of business by year end. Is the regulatory nerve there to push through what is clearly a controversial agenda. But the truth is that the Nigerian country outlook is dampened, and the momentum of the recent past has been deflated by the floundering executives and legislature that plays to the gallery. Nevertheless, there are vast opportunities for private ventures in Nigeria, as in the infrastructure, energy, manufacturing, solid mineral, tourism, etcetera. But for investment to come in in the quantum we can get, govt should begin to send the right signal, which for me is the pitfall of the last 13months. The size of the Nigerian market can not be defined mainly by the population, but also by capacity for consumption by the people. Hence emphasis should be on alleviating poverty, provision of security and of course infrastructure. Only when we make significant progress in this directions would the capital market be on the path of sustainable growth.

adamu mohammed
#6

27.06.08

GREAT KNOWLEDGE ENRICHMENT. KEEP IT UP.

Onah, Linus Uche
#7

30.06.08

There is no doubt that the events of the last couple of years has greatly increased the level of participation of Nigerians in the capital market. Unfortunately, the same cannot be said of the level of sophistication of the average Nigerian investor. The recapitalisation bubble that has just burst was built on massive ignorance: well funded and orchestrated media campaigns generated a BAND WAGON EFFECT on an abysmally naive investing public with mouth watering promises of unrealistically high returns. As the market unravelled in Q2, many counted their losses even as they took cover in massive shedding of their holdings and in the process learnt their very first (bitter) lesson in Investment 101. Are these same people going to move the remnants of their monies into private ventures? No, I do not think so, at least not in a hurry. If not for anything, they are VERY SCARED. But there are other factors why they would not including those same factors that underly the market glut: persisting huge infrastructural deficits, rising cost of living (food & oil prices), failure of governance, red tape, weak regulatory institutions, insecurity, and UNCERTAINTY. My guess is that they would rather dash for cover and use their monies to try and meet up with daily expenses and whatever is left is going to sit in bank accounts at the mercy of inflation. This is of course a simplistic model and there are many compounding variables not the least of which is good old IGNORANCE. I mean who knows when or how the next band wagon effect will start Lesson 2 in Investment 101 as the grossly under-informed Nigerian investor passes through his slow and painful ADULT education. We shall see

jaam megud
#8

05.07.08

Learning the curves.

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