By Goddy Egene
The stock market extended its losses for the third day as investors took more profit. As a result the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 1.1 per cent to close at 40,696.01 while market capitalisation shed N425.9 billion t o be at N21.3 trillion.
However, stockbrokers and some other stakeholders have listed the stimulation of private sector activities, creation of an intervention fund for securities dealing firms and consistency in government policies as strategies to grow the market.
They spoke at the 2021 annual economic review of the Chartered Institute of Stockbrokers (CIS) with the theme: “The Nigerian Economic Review for 2020 and Outlook for 2021 with Recommendations.”
For instance, the Chairman, Research and Technical Committee, CIS, Mr. Akeem Oyewale, said private sector activity needed to be significantly stimulated, while the Micro Small and Medium Scale business class should have greater access to viable long term capital.
“These will be effectively accomplished if the equity capital market is supported, strengthened and stabilized with continuous liquidity. Based on the universally acknowledged principle that the money (short term) and capital (long term) markets complement each other in the economic development process, we wish to call on the Central Bank of Nigeria (CBN) to extend the following structural / liquidity support to the equity arm of the Nigerian capital market,” he said.
He added that an intervention fund should be created for securities dealing firms, to avail them the necessary liquidity to maintain consistent position on quoted securities, thus stabilising the market.
“Permit banks’ stocks to qualify for investment of margin lending facilities, under strict regulatory controls, because of its significant impact on market turnover. In view of the gradual return of local investors, we enjoin the CBN to be temperate in dealing with interest rate, liquidity and yield adjustments in its monetary policy,” Adewale said.
An economist, Dr. Biodun Adedipe of B. Adedipe and Associates advocated for investment in Agriculture, ICT and manufacturing and urged the government to make credit available, accessible and attractive for investment.
Another economist, Mrs. Kemi Akinde, urged the government to align fiscal and monetary policies and ensure consistency of both policies. She also advised the Nigerian Stock Exchange to commence trading in derivatives without further delay to enable investors enjoy the opportunities for risk management. Akinde stated that the Securities and Exchange Commission ( SEC) should fully automate its fillings for efficient service delivery.