Shareholders in the Nigerian stock market have kicked against what they described as consistent and persistent lull in the bourse since January.
Their reaction came on the heels of an observed persistent decline in the major market indicators.
For instance, while the market capitalisation dropped from N9.15 trillion in January to N8.81 trillion as at March 20, the All Share Index also fell from 26,616.89 to 25,671.55 within the period under review.
According to the shareholders, the Federal Government has not been able to sustain some of the economic policies it introduced before the close of transaction in January.
Contrary to the directive of Government on January 23, that the Central Bank of Nigeria should continually review its foreign exchange policy to stabilise the naira by injecting funds in the forex market, investors have alleged that the commitment of both the government and the apex bank has been shaking since about two weeks ago.
Aggrieved shareholders, who spoke with The Point on the effect of the state of the economy on the capital market, said that plans were afoot to stage a protest to the National Assembly.
They warned that if that action was not taken serious, they might take the protest a step further to the Presidency, with the intention of attracting the attention of the government and forcing it to either implement or sustain its economic recovery policies, which they believe will rub off on the emerging bourse.
Following a directive from VicePresident Yemi Osinbajo (then acting President) on January 23, the dollar came crashing 24 hours after the CBN released $500 million to the banks, dropping from N525 to N450 within a few days.
This was one of the effects of the directive issued, after the National Economic Council meeting, to the CBN to review its foreign exchange policy, which had not been sustained by the government.
The government also set up a presidential task force on February 1, to address the unjust increment in prices of foodstuff across the country, an initiative several Nigerians believed would curb the activities of some traders that might want to inflate food prices unnecessarily, even beyond the recovery curve. But there are allegations that the task force, which reportedly swung into action immediately after it was inaugurated by Osinbajo, appears to be resting on its oars.
Though, a lot of critics believe that the Federal Government’s faceto-face meetings with communities in the creeks of oil rich Niger Delta, on how to stabilise the region, may not rub off on the capital market, investors are optimistic that such move would restore the confidence of some quoted companies, especially in the oil and gas sector, in the market, as the security of lives and property were assured.
The National President, Constant Shareholders’ Association, Alhaji Shehu Mikail, alleged that the neglect of some of the policies by Government was not encouraging.
He further alleged that the inconsistency in the policy of government had been part of the problems that had been affecting the growth of the economy.
He said, “It is when we have a strong indicator by government that it is serious about programmes that can transform the economy that we won’t carry out our plans.
“If our requests are not granted, we will go ahead with the protest. After all, every investor goes to the market to make returns on investment and if anyone works against that, we will also work against their peace.
The government must come up with some economic improvement strategies that can impact the lives of investors. When policies are made and reversed, foreign investors will not take the country serious.”
The National Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, also urged the government to be more committed to the sustenance of its policies to revive the economy, as the capital market reflects the performance of the economy. “The economy is not improving and the people are suffering.
Companies are ever folding up and some of the firms are also listed on the Exchange, which means it takes a toll on the market. The government must sit up and do the needful.
Investors’ confidence in the market is eroding, and some of us are dying out of frustration. It appears that the Federal Government is confused and does not know how to tackle the recession,” he said.
REVIEW MRR – EXPERTS
Chairman, Association of Stockbroking Houses of Nigeria, Mr. Patrick Ezeagu, has, however, called on the government to undertake a downward review of the Monetary Policy Rate.
If that is done, he believes it will stimulate investment, stabilise foreign exchange policies and implement appropriate legislation that will compel government to fund its infrastructural development through the capital market.
He said, “The Securities Exchange Commission is due to be strengthened with a view to positioning it to perform its market surveillance, market development and other regulatory functions more effectively.
“The Bureau of Public Enterprises should be compelled to sell at least 40 per cent of the privatised national assets through the instruments of the capital market and engender fair valuation, transparency, accountability, integrity and greater participation of the average Nigerian investor via the market to raise funds for infrastructural development projects.”
He insisted that the Nigerian capital market was a safe haven for both local and foreign investors.
Ezeagu added that the market’s potentials were largely untapped. “If the government ignores these potentials, it is doing so at its own peril,” he noted.
He said that ASHON was in the process of bringing on board a new Commodities Exchange, which when finally birthed, would encourage the electronic trading of various commodities like solid minerals, agricultural products, as well as oil and gas products.
“This, in effect, will give vent to the agricultural revolution, which the Federal and state governments are currently pursuing and give our members a new window of income generation, and investors, another option for investment,” he stated.
The Managing Director, Crane Securities Limited, Mr. Mike Eze, advocated for a public apprehension of the capital market.
According to him, such move will substantially provide a better structured public awareness campaign, which will be jointly anchored by the NSE, the SEC and the market operators, to educate shareholders on the protection of their interests, especially the small stock holders.
He observed that the average Nigerian investor suffered considerably, with many losers being first-time investors, essentially unaware of the workings of the market and relying on rising share prices, hunches and herds syndrome to take share-buying decisions.
“While considerable efforts have been made by the regulators to educate shareholders and address some of their complaints, I believe the public apprehension of the capital market will substantially open the minds of shareholders to see hidden treasures buried in the market,” he Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyema concluded.
