The turnover of shares traded on the Nigerian Stock Exchange (NSE) in the first quarter of 2012 dropped by 12.9 per cent, the News Agency of Nigeria (NAN) reports.
According to the statistics obtained from the Exchange, investors traded 19.14 billion shares worth N150.7 billion in 210,321 deals during the quarter.
This was against the 21.99 billion shares valued at N185.4 billion traded in 406,112 deals in the comparative period of 2011.
The All-Share Index also fell by 16.1 per cent to close at 20,652.47 points at the end of the first quarter against 24,621.21 recorded in the first quarter of 2011.
The market capitalisation also dipped by 16.8 per cent to close at N6.55 trillion against the N7.87 trillion posted in the corresponding period in 2011.
Stakeholders have attributed the poor performance to many factors.
Mr Okechukwu Unegbu, the Chief Executive Officer, Maxifund Investment and Securities Ltd., said that investors expectations were dashed due to poor audited results of some banks.
Unegbu also attributed the situation to the failure of market regulators to address the challenges in the capital market.
He said that the revelations during the House Committee’s public hearing on the capital market affected the first quarter performance.
Unegbu said that the market might experience a rebound in the second quarter if investors invested in companies that had declared impressive dividends.
Malam Garba Kurfi, the Chief Executive Officer, APT Securities and Funds Ltd., said that profit-taking by speculative investors affected the growth of the market in the period under review.
He said that the market would not experience any significant growth unless there was an improvement in market liquidity.
Mr Bayo Adeleke, the National Secretary, Independent Shareholders Association of Nigeria (ISAN), said that series of challenges had affected the growth of the capital market in the last four years.
He said that the allegations at the public hearing made majority of investors to be cautious about investing on stocks.
Adeleke predicted that the market would experience marginal growth in the second quarter if the public hearing could clear the doubts of investors.
Mr Boniface Okezie, President, Progressive Shareholders Association of Nigeria (PSAN), attributed the decline in the transactions in spite of impressive results to inability of the market regulators to protect investors.
He said that the Securities and Exchange Commission (SEC) should concentrate on confidence building because local and foreign investors had lost confidence in the market.
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