Stock Exchange: Financial experts proffer solutions to bearish trend

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Logo of the Nigerian Stock Exchange (NSE)

Some financial experts on Tuesday urged the Federal Government to infuse policies that would stimulate infrastructure development to tame the persistent bearish trend in the nation’s Stock Exchange.

They gave the advice in separate interviews with source in Lagos, South-West Nigeria, while reacting to the persistent downward trend in the equities market.

Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, in Ogun state, South-West Nigeria, said that government needed to formulate policies that would revitalize the economy for the capital market to grow.

“If the economy is growing steadily, the capital market activities will reflect more positive outcomes.

“While we have to be concerned about the bearish stand of the capital market, we need to realize that the market often reflects activities in the larger market, the economy itself,’’  he said.

Tella suggested that capital market regulators should continue to liberalize entry and exit from the market as well as encourage more firms to list on the Stock Exchange.

Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said that government should embrace friendly policies that would boost the capital market and the economy in general.

Kurfi noted that the market would recover with the harmonization of the monetary and fiscal policies.

He enjoined capital market regulators to rise up to their responsibilities and duties aimed at ensuring market development.

“There is a need for capital market awareness across the nation, which is not being done as well as foreign trips to bring awareness to both local and foreign investors,’’ Kurfi said.

Also speaking, Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said that stock market the world over oscillate to reflect economic fundamentals.

“To address the prolonged downtrend in the nation’s equities market, government needs to urgently assign portfolios to the ministers in order to kick-start governance,’’  Omordion said.

He said that the ministers as a matter of urgency should review the present economic agenda and embrace policies that would stimulate infrastructure development and productivity to complement the apex real sector drive.

According to him, the government and regulators should double their efforts on investment education to increase participation of Nigerians to support stability and reduce volatility.

Omordion also called for reduction in the cost of transaction and elimination of multiple taxation to encourage investors’ participation.

He explained that reintroduction of Value Added Tax (VAT) in all capital market transactions contributed to the bearish trend in the market.

Amaka E. Nliam