Analysts have advised investors to take advantage of the current price decline in the equity market and increase their holdings.

The analysts said that most stocks in the equity section of the Nigerian Stock Exchange were currently selling at their year-low, stating that it was a good time for investors to stake more funds in the market.

According to the analysts, the downturn recorded in the market is not expected to linger, adding that it is therefore wise for investors to buy more at this time.

Activities in the capital market have been declining since the middle of last month as major indicators drop, following the bullish run which occurred a few weeks before.

Specifically, the market capitalisation of the listed equities, which represents the aggregate value of all the companies or stocks quoted on the Exchange, fell by 6.6 per cent or N471tn from N7.137tn recorded three weeks ago to N6.666tn last Friday.

Similarly, the NSE’s All-Share Index fell by 6.6 per cent or 1,478.16 basis points to 20,902.95 points on Friday, down from 22,381.11 points recorded on May 18, 2012.

The NSE-30 Index also recorded significant decline in the period under review, as it fell by 6.3 per cent or 952.27 basis points from 1,016.30 points three weeks ago to 952.27 points last Friday.

Analysts said that the major downturn recorded in the market within the past month was mainly as a result of the exit of investors who switched to the money market to take advantage of the higher yields in that market.

They added, however, that investors should not view the significant losses in the prices of major shares as a disadvantage, noting that investors should take advantage of the low prices of shares to position themselves for future gains.

In their report on Monday, analysts from Partnership Investment Company Limited, said, “Market sell-down continued throughout last week as foreign portfolio investors switched to the money market segment to take advantage of the high returns recorded there.

“In our opinion, this has, however, created new buy opportunities in the stock market as many equities are currently trading below their book value. Therefore, wise investors could take advantage of the low prices of shares and position themselves for higher returns.”

The analysts also advise investors to ensure that they sought proper advice from financial experts before staking their funds in any stock.

“We maintain that investors need to maintain the right portfolio mix as the fixed income market pro-vide attractive alternative for now. Value stocks with strong fundamentals should be the focus as market depreciation has created new price levels that provide prospect for entry at this point,” they stated.

Source: Punch/Udeme Ekwere