INVESTMENT EXECUTIVES SPEAK
Capital market operators that spoke to Money Digest about the state of the Nigerian stock market have lamented that the activities of politicians is affecting the economy and is also taking a toll on the capital market which is regarded as the mirror of the economy.
The operators stressed that uncertainty of the political environment as well as inconsistent policies of government is affecting the economy and has warned that government should not ignore the economy and concentrate on political activities alone.
What is your view about the state of the Nigerian stock market?
The Vice Chairman, High Cap Securities Limited, Mr. David Adonri said: “We are experiencing lull in the stock market in recent times apparently as a result of the political uncertainty and macroeconomic environment that has not been favourable to companies and stakeholders at large.
Politicians should be guided to follow the rules of the game while government should intensify effort to addressing things that would spur the economy. The Central Bank of Nigeria, CBN has warned that the country might slip back to recession if stringent measures are not taken to boost the economy.
On the part of the stock market, there is need to continuously improve on investor’s confidence and uphold the trust and integrity of the Nigerian capital market. So , the regulators, especially, apex regulator, SEC should continue to enforce the rules and regulations that guide operations of the market vigorously.
There should be zero tolerance for infractions hence the severe sanctions on lawless principal officers as we have seen in recent past. Stringent measures are necessary to sanitize the capital market and enhance continued issuers and investors confidence.”
How do you see the present state of the stock market?
Managing Director, Capital Bancorp Plc, Mr Aigboje Higo said: “We have been seeing downward trend in the stock market in recent times because foreign investors are exiting the market due to political uncertainty in the country. Unless some action is taken the down turn will continue until the end of the year, but occasionally we will see some upward movement as people buy and sell to make gain. The downward trend is likely to continue until after the presidential election.
But hopefully going into next year things will change but it is our hope that once the election is over, depending on how it goes the market will begin to see positive development
On how will the third quarter performance of companies would like; there is going to be a mix of performance. Ordinarily, the third quarter results of companies should be better than half year but for the political activities that have taken place we might see a slide.
But by first quarter of next year, depending on how the election goes, we will see positive performance of companies.
ou see the state of stock market?
Managing Director, APT Securities Limited, Mallam Garba Kurfi said: “The stock market is actually going down due to the present political situation of the country. What we see in the market is low prices of stocks and they are trading below price earnings ratio of 10 which makes it cheaper than most of the frontier market which trade on price earnings ratio of 14.
So, there is bright prospect in future if economy improves. The economy is growing slower and is also affecting the market. There is hope if the economy starts doing well like we saw in the early part of the year and if the capital budget is released on time. Government need to take proactive measures as was advised by the CBN.
The CBN has kept the interest low for a long time; now that inflation is beginning to grow there is need for interest rate to go up.