Rebound in Nigeria's Stock Market is Up in the Air.
admatt30@yahoo.com
Now and even later when the global meltdown is over, our stock
market may not recover much of what it has lost. The
necessary ingredients- diversification and volume- of
efficient market seem to be thinning out. Importing industry
seems to be at the cusp of boom, if it has not been there.
Our economy hinges on the up and down of price of crude oil.
Because of our high-grade oil, commodity future price
dances to the tune from the oil-rich South-south often. But
that will not be for long. The resurgence of energy awareness
is charting the pathway of decreasing usage of crude oil as
the basal fuel of world economy. Even if the mental buffer
has yet to make a serious dent, the physical one is already
stabilising fluctuation in price. Floating storage- excess
tanker ships- of cheap oil off the U.S. coastline in the Gulf
of Mexico empties its content for domestic market whenever the
price is deemed too high. The same fills up at low price.
The future of oil is being threatened by renewable energy. We
might as well take the heightened research into the energy as
a sort of early warning.
By far the failure to maintain adequate supply of electricity
nationwide puts in the opposition to the worldwide mantra for
lower consumption of crude oil. Our refineries are yet to
meet just the transportation demand at home. The unmet demand
of others sectors is ripe to be exploited by importers.
Regardless of moral implication of lobbying against attempts
to boost production at home, flexing their political muscle is
in their own best interest so far as it is done lawfully. Who
can blame them? The cruel wheel of free market works with the
lubrication from democracy through legal campaign
contributions. Consumption of imported petrol and its allied
products is skyrocketing with mushrooming electricity
generators. Had there been a stead and reliable electricity
supply, there would have been very low demand for generators
and small engines in mostly urban areas. Today's comfortable
living depends on electricity for every inch.
For the comfortable living to be realised, cheap made-in-China
products are must-haves. Again, importers are as necessary as
ever. Home-grown manufacturers are things of pipe dream.
China is the undisputed manufacturing floor of world as it
is. So the import industry seems to be the only stock for the
smart money. Behind this industry is the service-providers
one. Third in rank is finance industry regardless of its
recent poor performance. Even in our cash-and-carry economy,
some sort of high-end financing is needed to move goods across
the international borders.
To secure your comfortable living, the faith-based industry is
in the business of blessing and putting protective hedges
around you and your love ones. Although the industry is the
green elephant in the upper crust’s living rooms, but it is
yet to be included in our national GNP in spite of its growth
rate and influential position. The question is how do you buy
stock in this fastest growing industry in Nigeria ? Until
that is answered, it ought to be number four.
As for now, the fact that our economy is pegged to U.S. dollar
is not automatic route for rebound in our lukewarm stock
market. What the U.S. market is actually experiencing is not
a natural momentum-driver but a decrease in the
differential rate of downswing due economic stimulus. The
efficacy of which is questionable to some degree because there
is no surety of up bound forever without unexpected dips now
and then.
The upswing pressure has to reach a sustainable one to have a
significant bearing on ours, a far-off downstream economy of
the mighty current of U.S. market. Just as much as distance,
tributary rivers, and the nature of terrain determine the
relative speed of water-flow downstream so are they applicable
in the recovery of our stock market. For distance replaces
with the quantity, tributary rivers insert influential
activity; and the nature of terrain thinks of middle market
between U.S. and ours.
With the quantity, we are just a short-lived blip on the radar
of the U.S. market, a vast ocean of activities. Its
directional point of change is beyond our influence when the
price of crude oil is neither too low nor high such as in the
last quarter of 2008. Between U.S. and ours, London is still
a middle market to reckon with even in this nanosecond age.