The Chairman, Association of Issuing Houses of Nigeria, ASHON, Chief Patrick Ezeagu, in this interview with Financial Vanguard, spoke on monetary and fiscal policies affecting the stock market, forth coming capital market summit and how government’s patronage, among others can boost the Nigerian capital market
WHAT is really responsible for the recent rally in the Nigerian stock market?
The Nigerian stock market was adversely affected by economic situation of the country in the last two years; but in recent time, we have started seeing some improvement.
The rally in stock market is majorly attributed to the monetary policy changes, such as the Investors and Exporters, I & E forex window, which allow investors to bring in their money at a well known market determined price. The Nigerian stock market is dominated by foreign investors and that has been the driver in recent time. So we would want the Central Bank of Nigeria, CBN, to sustain the I-E forex window until we have stability in the forex market. Also other factor is the Economic Recovery Growth Plan, ERGP that has been put in place by the federal government; that has given investors both local and international the direction of the economy in the next three years.
What is the Association of Stockbroking Houses of Nigeria, ASHON, doing in the area of boosting the stock market?
We have been collaborating with the apex capital market regulatory body, Securities and Exchange Commission, SEC and other self regulatory bodies, such as Nigerian Stock Exchange, NSE, Chartered Institute of Stockbrokers, CIS, Debt Management Office, DMO, among others to attract investors to the market. We organised a one day capital market summit, at the Intercontinental Hotel, Victoria Island, Lagos, with the theme “The Road to Nigeria’s Economic Recovery”. All these are part of our contributions toward attracting investors into the market.
How do you think governments can help to develop the capital market?
We used the summit to remind both States and Federal governments of the need to use the instruments in the Nigerian capital market to fund the N2.24 trillion capital expenditure in the 2017 budget recently passed by the National Assembly, NASS. As stakeholders in the capital market, we are all aware that the capital market is simply a barometer that gauges the performance of the economy; hence we all have a duty to support the government in whatever form that can bring about dramatic turnaround of our economy as Nigeria struggles to climb out of recession. So that is why we have invited both state and federal governments to come and brainstorm with market operators to see how we can develop the market.
How do you think the ERGP will impact on the market?
Recall that the ERGP was a blueprint adopted by the Federal Government as a process to ward off recession. The four year programme (2017-2020) is developed to promote a sustained inclusive growth with emphasis on both private and public sector efficiency. As market operators, we are equally interested in how the recently passed N7.4 trillion 2017 budget will affect capital market.
We should be advising the government on the investment opportunities in the capital market.The ERGP if well implemented will boost the economy and in turn affect the disposable income of the people. They can then save and invest their surplus in the capital market.