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BigSeun 9th June 2008 01:31 PM

MarketWatch
 
The NSE has intervened in the market. Prices can not go lower than the closing price of Friday. Hence, there will be no loser today.
Reason for this intervention is yet to be announced, but i guess is to protect investors from panic selling.

XXCASH 9th June 2008 01:59 PM

Quote:

Originally Posted by BigSeun (Post 20610)
The NSE has intervened in the market. Prices can not go lower the closing price of Friday. Hence, there will be no loser today.
Reason for this intervention is yet to be announced, but i guess is to protect investors from panic selling.

Honestly, when i saw the price list for today it looked like voodoo.

I wait eargerly to know the reason for this.

billions 9th June 2008 02:07 PM

Quote:

Originally Posted by XXCASH (Post 20614)
Honestly, when i saw the price list for today it looked like voodoo.

I wait eargerly to know the reason for this.

ope ooooo.Make i go buy d thing wey i wan buy,i dey fear b4.I believe that CBN will reverse d rule on margin facilities now....

kenebobo 9th June 2008 02:18 PM

who say prayers no dey work. I don get confidence now to invest more kudi into this show.:D

billions 9th June 2008 02:28 PM

Quote:

Originally Posted by kenebobo (Post 20616)
who say prayers no dey work. I don get confidence now to invest more kudi into this show.:D

I just checked todays price...it would hv been "too bad" if not 4 d intervention.Almost all stocks would hv been in red.

My guy,i will wait to c what will happen b4 making my decisions o.

Make i call my broker sef....

Abinishio 9th June 2008 06:26 PM

'Caveat Emptor'
Does it mean when our mkt is correcting we intervein?
I think this in itself can erode mkt confidence.
I'm happy for it ohh, at least my losses are mitigated, but is it good for the mkt generally?

Food for tot
AB

kenebobo 9th June 2008 06:56 PM

Quote:

Originally Posted by Abinishio (Post 20673)
'Caveat Emptor'
Does it mean when our mkt is correcting we intervein?
I think this in itself can erode mkt confidence.
I'm happy for it ohh, at least my losses are mitigated, but is it good for the mkt generally?

Food for tot
AB

From my own view, it is a good idea as this would give investors confidence and security over their funds. The recent downturn in market was as a result of fear of further fall of stock. Due to this people were selling massively resulting in more sellers than buyers which further lead to a decline in price. Investors prefered to have their money at hand than see it depreciate in the stock market, afterall the reason we are in this business is to make profit and not losses. The down trend was scaring investors.

With this news, it has given investors confidence that price wouldnt head south for a while which leaves only one direction for price to go which is North. people would no longer want to sell at will and buyers would want to buy because they now know that price wouldnt fall further so they would be willing to buy. This would make the market head upwards and give investors confidence over the market especially those that take loan from banks and place of work to buy shares. The only thing I would advice everone is to make their purchases before the market starts reacting to the news.

knightofdelta 9th June 2008 07:02 PM

Quote:

Originally Posted by Abinishio (Post 20673)
'Caveat Emptor'
Does it mean when our mkt is correcting we intervein?
I think this in itself can erode mkt confidence.
I'm happy for it ohh, at least my losses are mitigated, but is it good for the mkt generally?

Food for tot
AB

I was shocked when I did not see a single red on the closing list. I initially thought that the NSE had placed a technical suspension on all prices until I saw this post. I have been running from pillar to post to know what exactly was going on. Non of my stockbrokers picked my calls... I thought it was the end of the world or something.

They say what is good for the goose may not necessarily be good for the gander. Inasmuch as this order is a welcome one, I have my reservations about it. The market has a soul of its own and placing prices on emergency suspension (that's the best name that comes to mind to describe this phenomenon) is like damming a flood. I pray the tide ebbs very soon or else, it will boil over and it may end up being a catastrophic move. I feel strongly that the suspension is like using paracetamol to treat headache caused by cancer of the brain. There is no point doing a cosmetic surgery for a problem that has more serious underlying cause.

i will hold on to my money. I aint buying nothing else because I don't know what is going to happen. The only question I have now is that does that mean that all companies as at Friday have attained their minimum price levels forever? For how long is this emergency suspension going to last?

Well, we will wait and see what they have to say.

Taipan 9th June 2008 07:02 PM

Quote:

Originally Posted by BigSeun (Post 20610)
The NSE has intervened in the market. Prices can not go lower than the closing price of Friday. Hence, there will be no loser today.
Reason for this intervention is yet to be announced, but i guess is to protect investors from panic selling.

I think this is the most terrible development we've had in a long time! Don't this people understand the simple concept of a free market?

billions 9th June 2008 07:42 PM

Quote:

Originally Posted by Taipan (Post 20682)
I think this is the most terrible development we've had in a long time! Don't this people understand the simple concept of a free market?


It is a shame that they allowed things to degenerate to this point...the nigerian market is now constrained.:rolleyes:

zainabusman 9th June 2008 08:41 PM

Quote:

Originally Posted by Taipan (Post 20682)
I think this is the most terrible development we've had in a long time! Don't this people understand the simple concept of a free market?

I think this is a disaster. I will wait for the papers tomorrow to understand what NSE is thinking.

This is a free market. U cannot just manipulate prices like this.

This is the worst thing that could have happenned to this market.

zainabusman 9th June 2008 08:48 PM

Quote:

Originally Posted by knightofdelta (Post 20681)
I was shocked when I did not see a single red on the closing list. I initially thought that the NSE had placed a technical suspension on all prices until I saw this post. I have been running from pillar to post to know what exactly was going on. Non of my stockbrokers picked my calls... I thought it was the end of the world or something.

They say what is good for the goose may not necessarily be good for the gander. Inasmuch as this order is a welcome one, I have my reservations about it. The market has a soul of its own and placing prices on emergency suspension (that's the best name that comes to mind to describe this phenomenon) is like damming a flood. I pray the tide ebbs very soon or else, it will boil over and it may end up being a catastrophic move. I feel strongly that the suspension is like using paracetamol to treat headache caused by cancer of the brain. There is no point doing a cosmetic surgery for a problem that has more serious underlying cause.

i will hold on to my money. I aint buying nothing else because I don't know what is going to happen. The only question I have now is that does that mean that all companies as at Friday have attained their minimum price levels forever? For how long is this emergency suspension going to last?

Well, we will wait and see what they have to say.

I am also not buying anything until NSE explains what this "rubbish" is all about.

In my view any discerning investor will hold onto his or her money until things are clear. Afterall u can earn 9% or more in the money market.

XXCASH 9th June 2008 08:51 PM

Take it easy. Let us hear what NSE has to say.

They should better have a real good explanation for this

zainabusman 9th June 2008 10:04 PM

Quote:

Originally Posted by XXCASH (Post 20708)
Take it easy. Let us hear what NSE has to say.

They should better have a real good explanation for this

We will hear what they have to say in the next few hours.

But this is a huge mistake. This amounts to price fixing. Who do u think will now buy Investment and Allied Insurance? Is it not better to be able to sell and move on than to be stuck with a stock for a long time because no one is buying?

Look at Crusader Insurance for example that has been on TS for a long time. It should be selling for N6 or less. But it has now been pegged at N7.5. Is this fair to the rest of the stocks that took a beating in the last 3 months? Another one is Intercontinental bank which in my view is grossly over valued compared to the rest of the banks. Who will want to buy it at this price considering such a poor dividend yield and a PE of 24?

I am sure this kind of thing will not be done any where in the world. I hope the NSE reverses itself and let us have a free market. As it is the market is not longer a free one.

hispy99 9th June 2008 10:19 PM

Afrinvest says the a "technical glitch" was the cause of today's problem. Let's wait and see what will happen tomorrow.

zainabusman 9th June 2008 10:33 PM

Quote:

Originally Posted by hispy99 (Post 20719)
Afrinvest says the a "technical glitch" was the cause of today's problem. Let's wait and see what will happen tomorrow.

Thanks for this info. Because it will really be bad if NSE engages in price fixing.

I also noticed i could not access my CSCS account since Friday. I keep getting an error message.

Bearish 9th June 2008 11:04 PM

Hmmmmmm..... Technical glitch? How suscseptible is the market to these glitches? Why didnt it happen the otherway.... ie stocks could only move downward? Oh, sorry we were already doing that without the glitch!

On one hand it does save us from one more day of pain, but if it was an intervention, then it seems like anyhthing goes when running the exchange! They got us into this mess by banning margin trading and think that the exit strategy is artificial intervention.

Those who rejoice in this glitch or intervention should remember that what goes around comes around and the NSE junta could decide to put a price cap on stocks when they feel the market going too high! Oh, sorry they already did it with the 100k rule!:confused:

billions 9th June 2008 11:17 PM

My primary concern is that our stock prices should stop falling,....how the NSE sorts out the problem is of secondary importance to me.

In the 1929 market crash in America,many investors lost over 90% of their money and some committed suicide.I do not want this in Nigeria!

I am not saying that i encourage the fixing of stock prices but our elders say that "when a tree falls on another tree,...it is the uppermost one that we carry first."

...it is a shame that they allowed things to degenerate to the point of using this "fire brigade approach".

Michael 10th June 2008 12:36 AM

Cbn
 
Quote:

Originally Posted by billions (Post 20730)
My primary concern is that our stock prices should stop falling,....how the NSE sorts out the problem is of secondary importance to me.

In the 1929 market crash in America,many investors lost over 90% of their money and some committed suicide.I do not want this in Nigeria!

I am not saying that i encourage the fixing of stock prices but our elders say that "when a tree falls on another tree,...it is the uppermost one that we carry first."

...it is a shame that they allowed things to degenerate to the point of using this "fire brigade approach".

It seems the CBN cannot stay away from things they don't understand. They act first and then attempt to correct later. You want FDI and Then you scare investors away. You print new Naira notes and then you want to change decimal places. Its easy to spot confusion.

hokiebear 10th June 2008 01:05 AM

I think we are being a little too hard on the authorities at the NSE. Extraordinary market interventions by regulatory authorities isn't new and should not be interpreted as "price fixing". For instance, immediately after September 11, 2001, the NYSE was closed for four days and many other markets around the world did the same (so as to prevent investors from taking panic measures). Also, some stock exchanges (such as India's Sensex) have "circuit breakers" to safe-guard investors. The Sensex index suddenly dropping by a given percentage point (10%, 15%, and 20%) would trigger a system-wide suspension of trading for a specific length of time, depending on the severity of the drop.

The NSE freezing a further drop in prices is not necessarily a bad thing if they acted out of a belief that the collective free-fall in the market was due to grossly irrational fears and panic. Whether the chosen intervention measure was the right one for them to take is of course open to debate. The fact is, regulatory authorities are often faced with peculiar, extraordinary circumstances where they have to quickly come up with emergency actions in order to resolve or at least give a temporary reprieve. There is no playbook to read from, and every country may need to respond differently depending on its circumstances. The NSE absolutely needed to do something to restore investor's confidence. To that end, if they did indeed intervene, then in my opinion, they performed their regulatory duties - and that is a good thing.


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