LAGOS- A capital market expert says that the country’s bourse may not have met the expectations of investors with penchant for short-term investments in the first half of the year.
The Managing Director of Vision Trust and Investments Ltd, Mr Emma Ohanwusi, told newsmen on Tuesday in Lagos that the prostrate character of the economy would continue to impact negatively on the capital market.
Ohanwusi explained that global food crisis, high price of oil and the nation’s energy problems were additional burden to investors and the capital market.
Reports say that in the first six months of 2008, investors cumulatively average net worth in the capital market declined by about 45 per cent.
According to him, while all hopes of possible rallies are not lost, government must not only stop at mobilising Nigerians but show commitment and the political will to revive the economy.
Ohanwusi said that the current equity prices stabilisation at the Nigerian Stock Exchange (NSE) was a temporary reprieve that lacked economic fundamentals to sustain steady market growth and returns to investors.
He attributed the noticeable growth of equity prices in the nation’s capital market to the ad hoc economic policy reversals of government.
The policy reversals, he said, included the suspension of the recapitalisation of capital market operators, extension of the harmonisation of banks accounting year and government clarification on margin trading accounts.
He commended the regulatory authorities for their proactive commitment in re-inventing the investing public confidence in the capital market.
He, however, said that the positive oversight functions were being hampered by the national economic rout and organised market infractions by corporate organisations.
“Equity prices growth can be sustained on the condition that favourable and consistent economic policies are carefully fashioned out by government,” he said.
Ohanwusi also identified the nation’s energy crisis as another drawback, stressing that “it has become near impossible for quoted companies to plan and meet their projections and give returns to investors.”
He explained that the energy crisis coupled with the lingering Niger Delta issue, the Bakassi question and the undefined crusade against corruption were complex dynamics that had shaken investors confidence in the nation’s capital market.
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