Nothing perhaps best eclipses the boisterous confidence of the CBN governor’s financial outlook than the gloomy day in, day out, week in, week out stock market reports. Up until August 2008, the market was in a bullish run leaving investors and brokers chanting ‘ole ole’ all the way. More than five months later it has become the painful norm to witness an all losers day on the trading floor of the NSE; the very foundation of Nigeria’s financial is suddenly being threatened.

Abayomi Obalolujo the CEO of Stocks Watch Group believes profits should be expected from organizations whose products are perfectly elastic i.e. the change in price will bring about little or no change in demand. His forecast for the bulk of the corporate world is apocalyptic; more companies will bite the dust this year.

But this broth had been stewing for some time; two years ago unfettered access to margin facilities helped stock-brokers acquire shares that they couldn’t buy with liquid cash. And as a result, they were able to buy and sell more shares which led to increase profits as well as increase in demand; fueling the long bullish run the market experienced prior to its slump. When Nigeria’s fiscal regulatory body stepped in to withdraw the phantasmagorical margin facilities, several stock brokers blamed the CBN for the following days and week’s slump in trading activity.

But the damage had long been done, in 6 months the value of the market has tanked by more than 10 trillion naira. What is more remarkable is the banks still boast that they’re healthy, which means there isn’t talk of a bail out. The CBN Governor sounded the death knell on such a venture when he recently announced that the entire 3. 1 trillion naira national budget wouldn’t be enough to rescue a failed bank if such a scenario came up.

The chickens have come home to roost; the beautiful, expensive suit wearing, sweet talking svelte ladies, blasphemously proclaiming Solomon’s wealth in exchange for your hard earned cash have been replaced by apprehensive investors, Usain Bolting Stock brokers and Bankers soliciting the EFCC in capturing the debtors . Hawk eyed, all the actors in this unfolding drama are strange bed fellows not willing to shut an eye on alleged perceived failings of the stock market’s regulatory body , SEC which unfortunately has now become all too glaring.



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