An economic expert and Head of Banking and Finance Department, Nasarawa State University, Professor Uche Uwaleke, has called for the diversification of the Nigerian capital market.
Speaking with stakeholders at a colloquium with the theme, “Fiscal and Monetary Policies for deepening the Capital Market in Nigeria”, Uwaleke said it was wrong to leave the local market at the mercy of foreign-portfolio investors, to control and determine its success and
failure.
According to him, “the market is tied to the apron string of foreign investors so much so that if foreign investors sneeze, the market catches cold. We need to diversify the capital market for sustainability; this is because if the big companies go under, that will be the end of the capital market.”
Professor Uwaleke who was honoured on the occasion as the first Professor of the Capital Market in Nigeria, observed that the market capitlisation of the Nigerian Stock
Exchange was still insignificant when compared with that of South Africa, noting that all stakeholders in the market should work hard to grow the NSE capitalisation beyond its current level.
Similarly, Managing Director/Chief Executive Officer, APT Securities and Funds Limited. Mr. Kurfi, said there was the need to mobilise local investors with strong capacity to invest in the market, in order to reduce the dependence on foreign investors and prevent unnecessary shocks.
“Just as the name implies, portfolio investors are unreliable set of businessmen. When the economy looks good, they bring their portfolio of money and when it looks bad, they vanish into the thin air with their portfolio of money, creating more instability in the system. Nigerians should know that we are the only ones that will build and develop our country,” Kurfi said.
According to him, the primary reasons for the depressed state of the market are due to sell-down by foreign investors. “While the large presence of foreign investors signifies strong attraction to the country and our market, since these are foreign currency, their sudden reversal also portends great danger for the market,” he stressed.
