The Association of Securities Dealing Houses of Nigeria has said the Nigerian capital market has capacity to survive the ongoing insecurity and macroeconomic challenges militating against investment opportunities.
ASHON said the government could revive the securities market through measures such as the enhancement of stockbrokers’ liquidity and implementation of some policies to boost investment in the market.
Its Chairman, Chief Onyenwechukwu Ezeagu, said in a statement that the stock market had always exhibited resilience.
He said, “The stock market could be said to have become resilient to upheavals in the economy but with the heightened insecurity, we want to believe that the market will survive, given that opinion leaders have continually advised the actors to jaw-jaw rather than war-war.
“We all need to tone down our words and actions for our country to avert catastrophe and ensure that our economy is sustained.”
He said the successful completion of the demutualisation process was a great delight to securities dealers.
Ezeagu said, “Our members have eagerly expected this transition with high hope. We expect to reap the benefits of shareholding in a fledging stock exchange, one of the best in Africa.
“The local investors, quite frankly, understand the concept of demutualisation after our members have spoken to them in the language they understand i.e. demutualisation means that securities dealing firms have transformed from being dealing members firms to shareholders and trading license holders.
“We have local investors who are well-informed. However, we still need to guide them to follow the consequential changes that may follow the Exchange’s new orientation towards profit making.”
On how to boost stockbrokers’ liquidity, Ezeagu said the Central Bank of Nigeria should reintroduce the margin facility to help improve liquidity in the market.
He said, “It should, in conjunction with capital market operators, design effective guidelines that will de-risk the product to avert past experiences in margin lending in the market. The margin terms and conditions should also be reviewed in line with the current realities.
“The government should patronise the capital market — the taste of the pudding is in the eating. This will spur others, including foreign investors to believe in the market. The government should urgently consider the proposal by the Securities Dealing Community, ably represented by the Chartered Institute of Stockbrokers and the Association of Securities Dealing Houses of Nigeria through the Capital Market Master Plan Implementation Committee on the rejuvenation of the market as part of the financial system review currently being worked on.”
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