Posted by The PM News on
With the global financial crisis spreading tomany financial capitals across the world, many Nigerian stockbrokers are finding it difficult to sell their stocks.
With the global financial crisis spreading tomany financial capitals across the world, many Nigerian stockbrokers are finding it difficult to sell their stocks.
Investigations by P.M.News revealed that panic has gripped thousands of Nigerians who invested in stocks as they are finding it difficult to sell their shares. It was learnt that many stock brokers on the trading floor of the Nigerian Stock Exchange cannot find buyers for the million naira worth of stocks dumped on them for sale by their clients.
'There are thousands of stocks for sale but there are no buyers,' an exasperated stock broker told his worried client. P.M.News investigations revealed further that because of the liquidity problem, occasioned by the international financial crisis, many Nigerians are no longer buying shares but preferred to sell the ones they have.
The rush-to-sell off the shares, it was learnt, followed the daily fall in prices of stocks. For instance, the price of a unit of First Bank shares which was sold for as high as N50 per share in the first quarter of this year has dropped to a little above N20. The same thing is happening to the shares of all companies quoted on the Stock Exchange.
A stock broker from the firm of Jericho Associates, Mr. Yinka Omotosho, attributed the falling prices of stocks to liquidity problems, caused by the global financial crisis. He also blamed the situation at the stock exchange on the speculators 'who are after short term benefits.'
Omotosho described most Nigerian investors in stocks as speculators who are only after short term gains rather seeing it as a long term investment. He said fear about the prices of stocks falling further has driven many Nigerians to flood the market with their shares for sale.
'The prices are only reacting to the popular law of supply and demand. If you have more suppliers than buyers, then the price will fall,' he said. The stock broker advised Nigerians not to panic because the market will soon pick up. 'In fact, this is the period to buy more shares. Now that prices have dropped, Nigerians should add to their existing stock of shares so that they can reap bountiful benefits in the long run,' he stated.