Comments by NSE Officials

[hispy99]

BusinessDay... the voice of business - Share prices to ride on back of investment inflow

I read comments made by NSE officials and I am alarmed at the stuff they say. I think it is very irresponsible for NSE officcials to make comments that make the uninformed to believe that returns in the capital markets are guaranteed. To make matters worse, Mr. Musa Elakama believes that there will be a new bullish run becase "the highest priced stock on the stock exchange was still less than one British pound. Will someone please tell Mr. Elakama that you do not look at prices in isolation? You need to normalize prices to come up with an objective opinion whether a stock or stock market is cheap or not...that is why people use PE ratios... Soon, Mr Elakama will tell us to buy First Aluminium because it is selling at N1.76 and therefore very cheap, but dump Nestle because it it at N220 and very expensive. Below is a snapshot of the interview:


"Musa Elakama, assistant director general of the Nigerian Stock Exchange, disclosed this in a recent interview with Business Day in Lagos. Elakama was reacting to insinuations of overvaluation of stocks and a possible burst in the market.

He said the previous bullish runs in the market would be a child’s play compared with what would happen soon. The assistant director general believes that the Nigerian market is still young and growing compared with developed markets that have reached their peaks. To convince doubting Thomases, Elakama said his calculation was based on the fact that the highest priced stock on the stock exchange was still less than one British pound.
As a confirmation of his posture, the London Stock Exchange (LSE), in collaboration with some UK-based fund managers and market operators, had held a conference for Nigerians that would like to raise money from the LSE. "

[Avocado]

It is a wonder how such a man came to occupy the position he did when he made the comment. The point is elementary, yet he was ignorant of it. He has no business making public comments, and ought to stick to whatever he does in his office.
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[ikpong]

It is fortunate that those in public offices in Nigeria always like to draw unnecessary parallels with what goes on in Europe and the US. There are no parallels when we think of the economies, iI dare say the polical economies of those comparator nations. It is a similar excuse that is invoked when fuel prices are increased. It is rather unfortunate that we always have this comparison of apples and oranges.

Ikpong

[crtide]

Originally Posted by Avocado

It is a wonder how such a man came to occupy the position he did when he made the comment. The point is elementary, yet he was ignorant of it. He has no business making public comments, and ought to stick to whatever he does in his office.
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Whatever is done in darkness soon comes to light, there is no way to keep such ignorance covered up, even in the "backest" of offices.

The market is becoming more sophisticated, people like that will in the very very near future either shape up or out!

[newton]

Its funny how a highly place official of the NSE could be so ignorant of basic valuations. May be some shd remind him that the so called low priced nigerian stocks hav billions of shares outstandin (oceanic -22bn) compared to d 100m-500m issued shares of most NYSE and LSE listed securities. It'l come down to the Earnings/div yield whc currently indicates that our stocks (NSE) are overpriced, and lest hope the forward ratios (PE, EPS..) are correct cos if not a market correction is lurking around