Banks' results drive equities market to recovery

It is indeed a time for investors on the Nigerian Stock Exchange (NSE) to heave a sigh of relief with the northward movement in the prices of equities in the last couple of weeks, even as transaction in the second quarter of the year is expected to close in the positive territory.
Although equities value has witnessed a decline for a day or two, the cumulative figures of trading activities in the stock market since the release of some banks financial at the close of the first quarter may have led credence to the permutation by market watchers that the equities market is on its way to recovery.
It will be recalled that trading in the shares of banks before and after consolidation has always contributed to about 50 to55 per cent of transaction volume in the market just as this has continued to dictate the direction of the market in value terms.
The positive financial base being declared by banks in their 31st December 2010 result is no doubt beginning to rub on the blue chip companies and stocks considered in investment parlance as one investors need to take a second look at, as there is a daily recording of price appreciation which continues to beat imagination on what is exactly the driving force behind them.
The removal of obstacles to the progress in the movement of share prices in the market can easily be traced to the commencement in operation of the Asset Management Company of Nigeria (AMCON) whose operations have ensured banks have a negative non performing loan over hang.
The Scheme seems to have brought succour to the market through its buying of the over N2 trillion toxic assets of banks listed in the market and this is taking tolls on other stocks who, in no way, are related to the financial institutions.
The lifting of the burden of debts on the banks whose capitalisation currently accounts for almost 34.2 per cent or N2.9 trillion as at December last year coupled with the negative debt balance sheet all of them are expected to reel out in the year, is making investors to swoop on the shares of banks.
A peep into the review of the market last year showed that 14 banks along side other eight companies made the 20 most traded stock list in the market and this accounted for 62 per cent of total trade in volume terms in the market for 2010.
Information in the market has it that why it is good to invest in companies whose stocks has intrinsic value, it is also germane to note that all over the world where investment in stocks existed, it is wise to understand when to enter the market and when best to exit.
Except for those who are investing for the long time period,  other investors, both short and mid-term, must know when exactly to take their leave if the income they so desire from the stock market will end up as mere wishful thinking.