Analyst Blames CRR For NSE’s Bearish Trend

The bearish trend experienced by investors at the floor of Nigerian Stock Exchange (NSE) currently has been attributed to the increment in the Cash Reserve Requirement (CRR) for the public sector deposits.

The Central Bank of Nigerian (CBN) in July raised the CRR on public sector deposits, including deposits from the three tiers of government, from 12 per cent to 50 per cent.

An analyst, Mr Chidiadi Clement who is a broker in Port  Harcourt, said that the recent increase in CRR scared some investors who tried to watch the market to know the resultant effect of the increase before investment.

Clement said that it is the watch that caused the recent decline in the NSE transactions, which he said will improve with time.

He reiterated that the bearish trend was not a sign of crash in the capital market adding that business-minded investors would use the opportunity provided by the low cost of shares to buy more.

The analyst also said that the situation will return to normalcy within few financial months, adding that the market watchers would soon commence investment in equities, when the market stabilises.

He noted that financial information has a way of causing a down ward or up ward movement in the capital market chart.