For Nigeria’s capital market to witness sustainable rebound, stakeholders have stressed the need for the new Minister of State for Finance, Zainab Ahmed, to review current laws and policies that are meant to create enabling environment for the private sector to operate optimally.
According to them, this would enable quoted companies to deliver additional value to their shareholders, and attract investors’ patronage on the secondary market.The stakeholders argued that there must be an impact assessment of Nigeria’s macroeconomic fundamentals, to ensure it is not at variance with the operations of the market.
A stockbroker and Chief Executive Officer, Sofunix Investment, Sola Oni, said the new minister must take the first shot by engaging operators in the capital market.He said: “The capital market is a victim of uncertainty in the political and economic environment. Only recently, the Association of Stockbroking Houses of Nigeria (ASHON), issued a strong statement, cautioning politicians against unguarded statements, which stirred foreign portfolio investors and their Nigerian counterparts to embark on dumping of shares.
“Consequently, the broad valuation of the stock market is low, as the market undergoes volatility almost on daily basis. However, the trend has also created a big opportunity for real investors to beef up their portfolio, as most shares are traded below their intrinsic value while the market fundamentals remain strong. “Coming at a period when investor confidence in the market is under intense trial, financial inclusion policy should be vigorously pursued. Savings culture is ebbing away in Nigeria, and without saving there cannot be investment. “He also called for a deliberate review of the investment policy for pension funds in the stock market, to make them more active and deepen the market.
The Managing Director, HighCap Securities Limited, Imafidon Adonri, said for the capital market to perform effectively, public policies must facilitate revival of the primary market. “Less government borrowing and low single digit interest rate will help in this regard. To enhance investors’ confidence, good corporate governance of the SEC is essential.
“The SEC board should be constituted. Public policies should enhance flow of credit to the capital market. Through legislation, eligible enterprises should be compelled to list to deepen the market, “he added.
On his part, President, Constant Shareholders Association, Shehu Mekail, said: “What happened is most unexpected at this period, but what shall we expect from an administration that does not have a template that could elevate an economy like Nigeria. What is expected from the new Finance Minister is to first of all constitute the board of SEC to restore investors’ confidence, as most investors have started losing confidence in the market. “
Another shareholder, Moses Igbrude, urged the new minister to focus on how to assist the private sector to grow and consequently list shares on the exchange. “The private sector is the driver of the economy. By providing an environment conducive for them to operate, companies will do well, and this will impact on the capital market.”
Source: G Business