At the ninth annual Pearl Awards public lecture for capital market development, stakeholders discussed how to enhance the market’s growth.
Participants, who spanned across investors, operators, regulators and companies, were unanimous in their submission that “the capital market is an engine room for sustainable economic growth,” noting the great need to further return the market to the path of growth and stability.
Delivering the lecture with the theme ‘Enhanced capital market growth, recovery and stability: Path to sustainable national economic development,’ Olusola Dada, chairman/CEO, Anchoria Investment and Securities Limited, noted that “the level of stock market performance in Nigeria has remained relatively low in spite of the various reforms and institutional changes put in place by the monetary authorities.”
He said: “It is also evident that the low level of monetisation of the economy, the high rate of inflation and the level of private sector credits, have negatively affected the level of stock market performance in Nigeria. Although the level of interest rates has remained very high, the level of private sector credits has not sustained the desired level of new investments necessary to facilitate growth in the economy.”
In order for capital market to enhance the Nigeria economic growth, Dada suggested that government should encourage more foreign investors to participate in the market to improve market capitalisation; “there is need to restore investors’ confidence to the market by regulatory authorities’ activities that portray transparency, fair trading in the stock exchange; and there is need to ensure stable macro-economic environment, encourage foreign multinational companies (MNCs) or their subsidiaries to be listed on the NSE.”
He also noted the need to boost the value of transactions in the Nigeria capital market, “there is need for availability of more investment instruments such as derivatives, convertibles, swaps and options in the market. There is also the need to enhance the level of corporate governance in the stock market system and also strengthen risk management in the stock market system.
“The supervision and regulation of financial sectors should be strengthened, with a focus on risk management. These will be very useful in enhancing the level of stock market performance in Nigeria.”