Resurfacing of liquidity  
THE resurfacing of liquidity in the stock market has been attributed to the approach by investors in the purchase of stocks, even as the recent non plausible financials of major blue chips companies coupled with the turn of events at the Nigerian Stock Exchange (NSE) and the Securities and Exchange Commission (SEC), did not affect cumulative value rise in shares.

Controlled breath in the market has followed the massive profit taking which has characterised activities in the last one month, wherein both local and institutional investors (foreign investors) took advantage of gains recorded in the market in the recent times.

Investors, especially those outside the shores of the country, according to findings are beginning to once again take position on virtually all the listed stocks, but with much emphasis on the healthcare and banking subsectors.
Further findings reveal that investors are of the belief that with the blue chip stocks coming up with reasonable bottom line devoid of non-performing loans, they are bound to return good profit even as their stocks are set to rise in value.

Permutations, prior and post the half year, stated that the market would likely experience some form of rebound when the banks and other strong capital base conglomerates begin to release their financials from the end of the last quarter of 2011, the market would not to suffer great depreciation again.

However, the present stability creeping into the market may in due course experience some form of depreciation owing to some investors who may want to catch in on the rise in prices of shares in the market to take profit.

Market experts had reasoned that while the liquidity in the stock market lasts,  coupled with the determination of the new chief executive officer of the NSE to make transparency and sound corporate governance his watchword, confidence by investors in the market will continue to grow.

It will be recalled that liquidity squeeze in the market before now had been a major headache for both operators and regulators who felt they have done all that is needful to bring back funds into the market, but the reverse has been the case. The resultant effect was the glut of shares in the market and no buyers.

But the injection of funds into the market in recent times by institutional investors, most of who are from outside the country, beginning from the first quarter of the year has helped the market to appreciate in value.

Market observers believe that the anticipated listing of new companies due to upbeat transaction in the equities market, and with respect for the rule of law which is the fulcrum on which the market thrives now being observed , the market will continue to go northward.

How the market can thrive more
The market as it stands today, judging by permutations would need the collective effort of the regulators, operators as well as investors to make the market thrive again.

he market as it stands today, judging by permutations would need the collective effort of the regulators, operators as well as investors to make the market thrive again.

A lot of public awareness is needed at this point in time, because majority of investors have considered the stock market to be an anathema of sorts, and are only waiting for an opportunity for activities to rebound for them to exit.

The situation that is likely to occur because there are already signs, is that the market is heading towards stagnation, where millions of shares will be available for sale and no buyer will be willing to stake his/ her hard earned money into the purchase stocks.

There is need to put in place a lot of incentives like severe cost cutting measures, so as to put the market, which is said to be the barometer for measuring the growth and development of the economy on a sound footing again.
Also, all areas of wastage that were synonymous with past operations in the market should be blocked.
 
NSE's effort to stabilise the stock market
 Recently in its determination to deepen the value of the stock market, the Nigerian Stock Exchange (NSE) said that the Exchange has identified integrity, durable wealth creation and business development as a veritable tool to grow the market.

To this end, the exchange has concluded arrangements to come up with new products; options and derivatives that will be traded on the market beginning from 2012.

According to the Chief Executive Officer, Mr Oscar Onyema, the management of the Exchange has since co-opted 10 new members to bolster its oversight functions, adding that each inducted council member has subscribed to the code of conduct for council members.

He listed the asset class options to include: exchange traded bonds, equity options, index options and derivatives and financial features.

He noted that a lot of things need to be considered for the industry to be ready for the introduction of the new products. According to him, the Exchange needs to hire options specialists to drive the products to fruition.

“Such specialists will gather necessary mechanism to drive the products and until I have such persons on board I can't give you specific options. But my goal is that within two years we will be trading on the new products. Each of these options specialists has a market structure that will deepen each product,” Onyema said.

“Although not a listed a listed company, we have adopted a new corporate governance posture which is compliant with our listing rules, Securities and Exchange Commission's recently released Code of Corporate Governance for Public Companies, and international best practice in this important area,” he said.

Further on the drive to reposition the market for growth, the NSE CEO said the council approved another seven committees to oversee the various affairs of the exchange which he listed to include Audit, Demutualisation, Finance and General Purpose, Rules and Adjudication, Technology, Risk Management and Disciplinary.

Transaction in equities
Activities on the floor of the Nigerian Stock Exchange on Monday opened the week on the upbeat as transaction in the share prices of Dangote Cement Plc Conoil Plc led other gainers to lift market indicators.

The key benchmark indices maintained northwards to close in the green, taking support majorly from large capitalisation stocks which were particularly driven by these two stocks.

Dangote Cement led the gainers table with five per cent to close at N120.75, while Conoil followed with a gain of 4.97 per cent to close at N1.24.

On the other hand, Avon Crown led the losers chart with a loss of 4.96 per cent to close at N2.30, while E-transact followed with a loss of 4.95 to close at N3.84.

At the close of trading session, the NSE All-Share Index inched up by 1.22 per cent or 285.74 basis points to close at 23,381.05 as against 23,095.35 in the previous session.

Consequently, market capitalisation appreciated by 1.22 per cent or N91 billion to close at N7.440 trillion as against N7.349 trillion recorded on Friday.

The banking sub sector of the financial services sector led the market transaction volume with 125.3 million units valued at N1.1 billion, exchanged in 2,012 deals.

The volume recorded in the sector was driven by transaction in the shares of First Bank Fidelity Bank and Zenith Bank.

Healthcare sector activated by the shares of Diagnostics and Chemical Services followed with a turnover of 269.6 million shares worth N134.8 million in one deal.