The Chartered Institute of Stockbrokers (CIS) has called on the incoming administration of President-elect Senator Bola Ahmed Tinubu to address the issue of the exchange rate of the naira to help ginger more international investors’ participation in the local bourse.
The President and Chairman of the CIS, Mr Oluwole Adeosun, stated this in an interview while identifying some key areas that the incoming administration of Senator Bola Tinubu should address to strengthen the Nigerian capital market and reposition it for accelerated growth.
Adeosun explained that the incoming administration should pay close attention to the capital market to maximize its array of opportunities.
Exchange rate harmonization: He noted that both the capital and money market should receive balanced attention from the federal government and promote a unified exchange rate of the Naira to encourage the participation of foreign investors in the market. He said:
- “The fundamentals of the market are getting stronger day by day as a result of so many reasons. The elections excite the market, because of the imminent positive changes we expect, irrespective of which of the top candidates wins. It signals great expectation and trust.
- “We expect the new president and his government to hit the ground running before the inauguration by immediately opening engagement with the capital market community, as that will help craft an effective plan of action for the administration. We expect a stable and unified exchange rate which will increase the level of foreign investors’ participation in our market. We also expect policy and optimistic pronouncements that will boost the confidence of stakeholders.”
Balanced attention to Capital and money market: According to Adeosun, to properly situate the capital market in the scheme of things in the Nigerian economy, the capital and money markets must receive balanced attention for the economy to grow maximally, even optimally as the capital market provides the barometer that measures the state of the economy.
- “Second is to address the issue of trading liquidity. Get the banks and CBN to give more support to Capital Market Operators. We have to revisit margin lending /trading in the financial markets. Furthermore, persuade the pension funds to invest a lot more in equities, to create that stability that will motivate other high net-worths to invest. Also to make the exchange rate stable to spur foreign investments. He said that the government should lend more support to investor literacy and specifically support CIS with annual grants to enable it to perform and widen its work in this area,” he said.
Three frontline candidates: Adeosun explained that last week, the Nigerian stock market gained over, N600 billion adding that the reality was that all the three frontline candidates for this election are pro-market activists, so the capital market is excited that there will be a positive transition in leadership, from a market policy point of view.
- “Investors are also positioning in expectation of good dividends, especially from banking stocks, whose corporate actions are being expected. Based on historical records, competitive dividend yields may be in the offing. In addition, high-cap stocks like MTN, Geregu and Dangote Cement are majorly responsible for the upswing,” Adeosun said.