(by Ugonna MADUAGUFOR)
The better part of march daily trading results has not been without a big question mark as to the general negative trend in the average price of tradable stocks. According to the director general of the Nigerian Stock Exchange, Professor (Mrs.) Ndi Okereke-Onyiuke, Investorsmerely responded to heresays about the likely outcome of of the Securities and Exchange commission’s (SEC) ongoing probe on price manipulation charges affecting six listed companies of the exchange market.
Considering the trend in market price and market capitalization from the end of the first week in march to the last trading week in in same march 2008. Market Capitalisation started with N12.593 trillion and dropped to 12.15 trillion as at Friday last week, showing a relative decline in market capitalization by 3.5percent, while the all important All Share Index (ALSI) did not move in favour of the average share holding investor either as it also dropped from 66,121.93 points in march 7th 2008 to 63,141.04 asat Friday 28 0f march 2008, also showing a relative decline in price index by 4.5percent.
The companies being investigated includes: African Petroleum plc (AP), Big Treat plc, Afroil plc, Capital oil plc and IPWA plc. According to SEC’s announcement on the 13th of February 2008, the companies are being checked for allegations of price fixing and insider trading activities.The findings due to the investigations has led to a full suspension of the shares of Afroil and Capital oil plc, while the other four companies are still being investigated. Some other reasons that might have contributed to the decline in prices within the month of March 2008 could also include the easter season with its charachteristic domestic expeniture; and the Daar communications Innitial Public Offer requesting a gross amount to the tune of about N9,147,866,389.00 including floatation cost of offer; these among others tempting shareholders to sell rather than buy, causing prices to fall on the average.