The release of the final report of the last batch of the bank audit may have signalled the end of panic in the market as the Nigerian Stock Exchange (NSE) heaved a sigh of relief.
Speaking at the Exchange recently, its Deputy Director-General, Mr. Musa Elakama expressed the contentment that the impact of the release of the last audit report of the remaining 14 banks did not really shake the market as envisaged.
“Despite the release of the last audit report of the banks you can see most of the stocks are in the green. This shows that the worst of the market panic is over and I can assure you that this is the best time for anybody that has money to buy shares, especially when they are still at the very low prices” he said.
The Central Bank of Nigeria had recently released the concluding part of its audit of the remaining 14 banks in its ongoing efforts to sanitise the financial industry.
In the last report, three managing directors of Bank PHB Plc, Spring Bank Plc and Equatorial Trust Bank were sacked. Two of the banks are quoted on the exchange.
However, contrary to many stakeholders’ expectations, the market indicators went up on the next trading day, after the announcement, being Monday, October 5, 2009. Though the NSE placed the affected banks’ stocks on full suspension on the same day to avoid panic dumping, major equities were on the gainers side, which led to a 2.4 percent increase in the market capitalisation.
The Market All-Share Index for the day also rose by 2.4 percent to close at 23,026.69 as against 22.497.27. The rally also continued on the following day, which was as the market indicators also inched up, giving rise to the hope that the market might not succumb to the last pressure from the CBN audit.
Recall that the market had gone on a losing spree when the first phase of the audit report was announced in August 14 this year as investors out of panic dumped their shares. The development had raised concerns among stakeholders in the market that another round of shock was imminent with the release of the last batch results.