CIS seeks government intervention on falling share prices

Nigeria Stock Exchange (NSE). Photo/rainbowfm

…. Tasks members on competence
The Chartered Institute of Stockbrokers (CIS), has urged the Federal Government to make policies that will stir economic activities and trigger actions in the stock market.

The Institute linked the persistent free fall in share prices of quoted companies to the exit of foreign of investors who constitute a significant portion in Nigeria’s local bourse due to uncertainties, lack of information and passiveness in government programmes.

The 2nd Vice President, CIS, Oluwole Ololade Adeosun, told The Guardian on the sidelines of the Executive Conversion Programme, ECP organised by the Institute, in Lagos, Tuesday, that unless there are new information and assurance from government, the market will not record any significant improvement.

“Nigeria has not been able to give investors the right signal at the appropriate time to show that we are ready for business and good governance immediately, so when there is lack of information, and some passiveness in things coming up, investors will move. “Capital does not have patience to be docile, but will move to where it has assurance of safety, benefit of returns, and they can plan ahead. When there is no economic governance, investors will move.”

He continued: “Foreign investors constitute a significant portion of investors in Nigeria, about 45-50 per cent, and when 50 per cent decide to move at the same time within the scope of three to six months, a lot has moved out of the country.

“You cannot replace them immediately with the local investors who are equally sapped and tired, and they are not ready to invest so much unless there are new information and assurances. The regulators are doing what they are supposed to do; they cannot conjure or force investment in capital market,” he added.

Speaking at the event, the Head of Department, Banking and Finance, University of Lagos, Prof. Rufus Olowe, noted that “Most state governments cannot access the cheap funds that exist in the capital market due to regulatory requirements. Many state governments do not have financial records that are required by the Securities and Exchange Commission (SEC). Besides, the market is highly regulated and as such most States government cannot subject themselves to regulatory scrutiny, and that is why they cannot access the market. Only very few states have been able to access the market so far.”

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