Experts seek ways to sustain investments in stock market

Investors’ wealth appreciates by 25% in three months
Investors in the nation’s capital market have again called on the government to roll out incentives that would attract more domestic and foreign investment into the market, improve liquidity and sustain the price appreciation witnessed currently in the nation’s bourse.

Equity transactions on the Nigerian Stock Exchange (NSE) had  ended the first quarter (Q1) of 2017 on a negative note, as key performance indicators closed the quarter with a loss of N418 billion or five per cent.

Stakeholders who spoke with The Guardian argued that investors respond to incentives, noting that such motivations will woo multinationals and telecommunication firms to Nigeria’s capital market and boost market liquidity as well as sustain current spike on equities.

Surprisingly, between April and now, market capitalisation, which was N8,744 trillion on April 3, stood at N11,725 trillion as at Friday, July 21, adding 25.5 per cent, while the All share index rose by 26 per cent from 25,273.03 to 34,020.37.

Investors, who described the nation’s Stock Exchange as ‘undeveloped’, noted that such narrow and illiquid market has contributed to low level of investors’ participation in the market.

An independent investor, Amaechi Egbo, said the market illiquidity is evident in the low market capitalisation, and few listed companies that characterised the markets.

He argued that listing of multinationals in the market would make capital available for investors, adding that apart from capital inflow, the market also needs to be deepened with their participation.

A stockbroker with Delloit Securities Limited, Tunde Oyediran, said the market is faced with a number of constraints, which discourage investors.

Although, admitting that some achievements had been recorded in terms of market capitalisation, volume and value traded and the number of companies listed, he however added that more needed to be done to shore up the market capitalisation, and improve liquidity.

The national Coordinator, Constance Shareholders Association,   Shehu Mallam Mikail, noted that for the market to maintain consistent upbeat, government must reach wider consensus and define major sectoral priorities which must urgently be introduced in the form of policy formation to stimulate economic activities.

According to him, these priority sectors must be supported with incentives and other palliatives for them to attract more investments.

He added that government must be strategic, if it wants to fast-track the nation’s economic growth, and stimulate activities in the market to transform it from a primary commodity market to a sophisticated one.