I'm somewhat amazed with the popular misconception amongst Nigerian investors that their investments in shares are expected to remain above the bought valuation.
This easily demonstrates either lack of investment sophistication or/and mis-selling on the part of promoters.
I believe today's shares promoter has a greater duty to educate investors of their expectations and obtain third party verification of a investors understanding.
I recall parallels with the dotcom boom and bust cycle ending circa 2000, where valuations of technology shares went sky-high. The same pathetic noises are being made by retail and professional investors alike for guidance on market sentiment just read a cross section of this month’s Nigerian newspapers.
There is an inherent risk that capital inflows will reduce and the dearth of new market participants into the market, not a scenario we are likely to see considering the impact of the oil economy.
Serious erosion of market capitalisation remains a possibility and has been muted by several analysts both Nigerian and foreign.
I believe, opportunities will exit for shares where fundamentals and cash flow are proven, until the market leaders shares can demonstrate steady and progressive dividends market volatility is here to stay.
As added to financialnigeria.com
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