The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, has called on the federal government to prioritise the listing the Central Bank of Nigeria’s (CBN) proposed N15 trillion infrastructure development company (Infraco) fund on the NSE.
He said this yesterday during the virtual Businessday digital dialogue series with the theme: ‘New Perspective on Asset Allocation and Behavioural Finance in Volatile Markets.’
According to Onyeama, if listed on the NSE, it would enhance transparency, effective reporting as well as increase retail participation in public private partnership (PPP).
The Infraco fund is an initiative of the CBN that was approved last month by the federal government in a bid to stimulate infrastructural development across the country.
Furthermore, the NSE boss also urged the federal government to reduce the tax burden on publicly listed companies in view of the impact of the pandemic.
“One recommendation to the government from the capital market would be the expansion of the framework of PPP for infrastructure development. For instance, prioritising the incorporation of the CBN’s infrastructure company on subsequently listing its N15 trillion fund on the NSE for effective reporting and other global fund management standards,” he added.
Speaking further, the NSE boss said: “We believe the government should also ensure regulatory forbearance on pandemic alleviation schemes such as reduction of tax burdens for already compliant organisations mainly listed companies and delay implementation of any new taxes at federal and state level.
“Target intervention for local companies across sectors most hit by the pandemic and fast-track attractive legislations such as the pension reform act and the investment and securities act which are currently being reviewed.”
In terms of the economy and the current state of the NSE, he said: “The Covid-19 pandemic has resulted in a decline in oil export earnings which accounts for over 80 per cent of Nigeria’s export earnings and remittances by Nigerians in diaspora.
“Concurrently, foreign portfolio investor flight to safety has further intensified pressure on the nation’s reserves. However, in spite the highly volatile economic environment in Nigeria, the NSE has remained resilient surprisingly, domestic investors have risen to the occasion in sustaining the equities market performance.
“The low yield environment has positioned the equities market as a credible investment option for the domestic institutional and retail investors. This year, domestic investors have accounted for 60 per cent of the trading activity compared to an average of 51 per cent in the past four years.
“While we have witnessed a slowdown in equity capital raising due to the impact of the pandemic and decline in oil prices, we have seen capital raising activity in the fixed income space as a result in the relatively low interest rate environment.
“In Q2 2020 alone, we have seen new corporate debt issuance valued at N235.5 billion as well as N567 billion in government debt listed on the stock exchange. As at today, our bonds market capitalisation is N16.2 trillion.”
According to him, “Popular concerns of our stakeholders this period has been access to forex with other concerns bothering on current economic projection and stability of the naira.
“Because of this unique situation occasioned by Covid-19 and to ensure the stability of the Nigerian capital market and recovery of losses, I use this opportunity to again send word of inclusiveness to the government for consideration.
“One of such recommendations is to expedite the unification of the exchange rate by converging all foreign exchange rate windows to the investors and exporters rate in order to boost foreign and domestic investor confidence in government’s commitment to economic sustainability.”