As the challenges faced by the economy are likely to persist for some time, stock market analysts have expressed doubts over possible recovery of the capital market during the last quarter of the year.
The nation’s capital market has witnessed unprecedented lull due to volatile forex and macro-economic performance, even as foreign portfolio flows to emerging markets have turned negative.
The stock market which ended third quarter 2015 in the negative territory with 6.69 per cent. In second quarter, stock market rose by 5.39, while it lost 8.40 per cent in the first quarter. So far in the year, stock market has lost 13.92 per cent.
It would be recalled that the stock market ended 2014 as one of the worst performing exchanges with a decline of 20.67 per cent.
The managing director, APT Securities and Funds, Mallam Garba Kurfi, 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, saying that operators were disappointed with the ministerial list released by the government.
“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. 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.
The managing director of High Cap Securities Limited, Mr David Adonri, said, “So far, based on what has been released, the market is not impressed.
“We are seriously worried in the market that the bear run has not been reversed so far. For the past two quarters or so, the gross domestic product had been on a decline, but we thought that some other things could be done by the government to restore investors’ confidence.”
He added that with the ministerial list out, the market is looking forward to give impetus to the restoration of investors’ confidence.
While the former president, Chartered Institute of Bankers (CIBN), Mr Okechukwu Unegbu, said the capital market would continue to nosedive because of over dependence on foreign investors’ cash and dependence on policies introduced by regulators.
Source : Leadership