As the stakeholders await the Federal Government’s action on a petition by stockbrokers for a possible bail-out of the nation’s stock market, the benchmark index of the market   crashed further Wednesday to a record low this year.

The Nigerian Stock Exchange (NSE) All-Share Index, which opened the year at 24,770.52 closed at 19,925.97 yesterday following a persistent bear run that, had wiped out significant portion of investors’ fortunes in the market.

Specifically, the index went down by 0.43 per cent from 20,012.07 to close at 19,925.97, while market capitalisation of equities shed N27 billion to close at N6.329 trillion.

While the index has dipped by 19.56 per cent since the beginning of the year, the market capitalisation of equities have shed N1.585 trillion or 20 per cent between January and yesterday.

Market operators said the market would continue to decline if liquidity was not injected by the Federal Government to stimulate demand for equities   stocks in the market.

Some brokers had insisted that the major challenge in the market was liquidity following the restriction of banks from funding trading activities in the market.

“Many local investors are still  scared to return after many of them got burnt their fingers in the past. Before now, banks used to play a major role by providing liquidity in form of margin facilities. That has been stopped by the regulators. And stockbroking firms are not generating enough money from the system to pay their bills and reinvest in stocks. I believe the government should listen to the suggestions stockbrokers are giving on the way forward and inject liquidity. Otherwise, more losses should be expected,” a senior stockbroker said Wednesday.

THISDAY had Tuesday exclusively reported that stockbrokers had petitioned the Co-ordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, on the need to bail-out the nation’s stock market.

Some stakeholders had said the government should see the declining fortunes in the stock market as a national issue instead of calling it “stockbrokers’ headache.”

The market has defied improved regulatory environment management of the NSE and Securities and Exchange Commission has put in place recently.  Besides, listed companies continue to declare improved financial results, a development investors have been ignoring due to lack of investible funds.

Only 10 stocks appreciated yesterday while 30 stocks depreciated including leading blue chips. Flour Mills of Nigeria Plc led the price losers with N1.49 to close at N58.51, while Guinness Nigeria led the price gainers with N5.50 to close at N205.50 per share.

Source: ThisDay/Goddy Egene