Equity investors who buy shares at their current bottom-out prices may reap a bumper harvest from capital appreciation as market fundamentals remain strong.
The point was made in Lagos by the acting President of the Chartered Institute of Stockbrokers (CIS), Oluwaseyi Abe.
He urged individuals and institutional investors to take advantage of low equity prices to beef up and balance portfolios, explaining that the market is the barometer that gauges the mood of the economy.
Abe said due to the lull in the economy and the need to boost disposable income and meet other exigencies, many investors had dumped shares thus inducing bearish trading.
“Now that indices of uncertainties in the polity are fizzling out, especially with the appointment of the new ministers, the economy with its equity market would pick up soon,” he enthused.
Abe stressed that market fundamentals remain strong, the equity prices of many blue chip companies are currently trading below their intrinsic values, but the low prices would soon reverse.
“The new cabinet members have commenced work having been sworn in. Securities issues and corruption are being addressed daily. The management of exchange rate is being looked into as well.
“The current administration would hopefully utilise the market to fund the infrastructural gap in the economy in the wake of dwindling revenue from crude oil.”
Abe urged the federal and state governments to take advantage of the capital market to finance the economy.
