All about investment

by: Uche Vera I

In the wake of the third week of the second quarter of this year ,the stock market suddenly started going down .There was a kind of panic .The panic was understandable considering the fact that our market before then had been characterised by huge returns .And the beginning of this year was no exception .So obviously one has to panic when the bearish trend developed .

But if you had enough information ,you would know and understand that there was no way our market will remain in a bearish position .Ours is a developing market and it is an understatement to say that the potential for growth and returns in the market is huge. Let me give you a clear example .America has a population of over 300 million, a GDP in excess of $13 trillion and a market capitalisation of $15.35 trillion.South Africa has a GDP of $282bn and a market capitalisation of $759bn .In Nigeria we have a population of about 120 million ,a GDP of $160bn and a market capitalisation of $90 bn .Only about 2 million Nigerians are investors in the stock market .That is less than 3% .In the U .S 49 .7 % of the people invest in their markets ! The bulls will return. This clearly shows that our market in still emerging .

More people will definitely enter the market ,capitalisation will move up ,and more companies will get listed on the exchange .So the potential for more activities is quite huge . The Nigerian stock market is the best in the emerging market category of stock exchanges and among the best on return on investment .So ,the bulls will return. By the beginning of 2007 ,market capitalisation stood at N5.12 trillion and by December of that same year it has appreciated to about 100 % to N10.2 trillion .By the time we entered the third month of this year ,the market has appreciated by more than 20% to N12.6 trillion . Afri Invest west Africa recently in it's half year result collaborated the belief that our market will witness a steady bullish trend in the nearest future . So what is my point ? Even though the market is experiencing a bearish trend/volatility ,major indicators are strong and with the recent intervention of market regulators the correction of the market could have started in earnest .

What are you buying !! Our experts are suggesting that Transcorp should be included in your buying potfolio but definitely not in your selling . Starcomms joined the market on Monday at 13.56 . and gained close to 1.00 that same day .Wether it is a good buy ? Telecommunications is presently a lucrative sector and starrcomms has been involved in expansion projects ,so it is a good buy and it should be one of those equities you might want for keeps. Enjoy the rest of your week .

COPYRIGHT( C) 2008 Uche Vera Uche Vera is a journalism major .She writes on Business and Economy including general topics .She is a senior procucer and writer with a radio production outfit that specializes in business programming .visit her blog at http://financiallquotientt.wordpress.com