Hello Friends,

The stock market has been down for sometimes now and one wonders when the market will pick up. The crash we are currently experiencing started around May this year and since then there has been no respite. The market has defied all measures taken to reverse the crash and restore investors’ confidence.

The downward trend began when news filtered in that CBN has banned margin trading by banks and stock brokers. Banks and stock brokers immediately started recalling margins earlier granted investors. Investors in turn began selling their shares in order to escape from the panic and at least make some profit. Foreign speculators who had invested heavily in the market started pulling out. SEC also did not help matters by claiming there are price manipulations and insider trading which further eroded investors’ confidence. The final straw came with the global financial crises that started In America.

Before the crash, the market witnessed influx of investors most of them uninformed. They just heard that people are making money from the capital market and without adequate information and market research and with greed and get-rich-quick motives, they jumped into the market. These ‘Kalo-Kalo’ investors were just buying any stock in sight. Some of them bought dead stocks – stocks that died over 15 years. Some sold their properties, businesses, goods; some borrowed money all with the hope of making get-rich-quick, kalo-kalo gain.

Some of these long-throat investors have left the market with huge losses but some still remain. Until the remaining get-rich-quick investors exit from the market there will be no appreciable upward price movement. Any upward movement, these people will offload their stocks and price will fall. This is what happened when Government injected money into the market sometimes this year. Prices rose then ‘Kalo-Kalo’ investors moved in and sold stocks and prices fell again. So, until the get-rich-quick investors leave the stock market there will be no respite.

Remain Blessed