The negative trend witnessed in the capital market over the last two weeks may continue for a while, analysts have said.

Major market indicators depreciated in the week ended November 2, with the NSE All-Share Index losing 316.52 points or -1.18 per cent to close at 26,559.55. The week had opened at 26,876.07. Similarly, the market capitalisation of the listed equities decreased by N100.865bn or 1.18 per cent to close at N8.464tn.

It was a similar experience during the preceding week ended Wednesday, October 31, when as a result of the Sallah break, the market capitalisation had dipped by N176bn. The All-Share Index had also shed 551.63 basis points or 2.09 per cent to close at 26,430.92, after opening at 26,982.55.

According to analysts, unless there is a huge investment in the market, the trend is likely to continue, especially with the Christmas holiday around the corner.

A  stockbroker, Sam Ndata of Compass Investments and Securities Limited, explained the situation in the market at the moment thus, saying that there were more sellers than buyers. He explained that for the week ended October 31, the gains in the market as well as preparations for the Sallah break had led to profit-taking, which in turn affected market indicators.

He said, “What moves the market up is the willingness of people to buy stocks. So, if they are not buying, the indicators would depreciate.”

Ndata explained that although people are gradually coming back to the market, especially those who sold shares in preparation for the Sallah, some others whose shares have thereafter appreciated are looking forward to getting money for Christmas and to send their children back to school in January.

“So, people will continue to sell instead of buying,” he said, adding that “unless there is special money coming in, the trend will continue for now.”

Commenting on the trend, the Chief Executive Officer, Trust Yield Securities Limited, Mr. Ola Yussuff, said people were more concerned at the moment with the end of the year position.

Explaining that the trend might continue, he said, “Traditionally, it is a low period we are entering into now because operators use this period to tidy up their end-of-year results. Therefore, we don’t have much activity.”

Yussuff, however, stressed that there might be some exceptional situations, such as a big buyer entering the market, which might lift the market tempo and make prices go up. However, he said in the absence of such, the market might likely follow the tradition of low activity, and possibly “stabilise around what it is at the moment.”

Source:Punch (written by Simon Ejembi)