Some capital market operators on Thursday said that instability and sell pressure in the nation’s bourse would persist till the first quarter of 2016.
They said in Lagos that the market in the fourth quarter would be dominated by sell pressure due to forthcoming festivities.
Okechukwu Unegbu, a former President, Chartered Institute of Bankers (CIBN), said the capital market would continue to nosedive because of over dependence on foreign investors’ cash and dependence on policies introduced by regulators.
Unegbu said that the foreign exchange risk would continue to discourage foreign investors from investing in the nation’s bourse.
“We are over-dependent on foreign investors who are eager to leave the market anytime negative things happen and this is not good for our market,’’ he said.
He said the capital market regulators should strategise on ways to boost local investors participation in the market instead of filling all sort of cash requirements for operators.
Unegbu said that nothing would happen in the market this quarter because Yuletide celebration and payment of school fees would continue to put pressure on the supply side of the market.
He said that contrary to expectations that the ministerial list released by the Federal Government would not affect market performance because of confirmation process and portfolio announcement.
He called on investors to take advantage of low prices of equities and increase their stake in the market.
Mallam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said the lull in the market would persist due to government’s inability to release its economic blueprint.
Kurfi said the market lost N500 billion in the third quarter, noting that the trend would continue in this last quarter with the non-release of government economic policy.
He said that operators were disappointed with the ministerial list released by the government on Tuesday, noting that the list was dominated by politicians.
“We have not seen any economist in the list that can suggest to the government ways to improve revenue generation and how to run the economy,’’ Kurfi said.
He noted that the list was dominated by politicians with only one economist.
“Investors are still waiting for that economist and that is why the market did not react to the list released,’’ he added.
Kurfi said that the economy needed incentives that would trigger job creation with the dwindling revenue generation due to fall in crude oil price at the global market.
Mr Bayo Adeleke, National Secretary, Independent Shareholders Association of Nigeria (ISAN), expressed the opinion that the ministerial list or appointment of ministers would not impact the market significantly in this last quarter.
Adeleke said that the federal cabinet would not be formally constituted until early November.
He said that the ministers would only settle down to draw up budget of their ministries for 2016 before the year ends.
Adeleke said that “the only thing that can boost market performance this quarter is significant third quarter results by companies’’.
