By Taofik Salako
The bullish rally at the Nigerian stock market gathered momentum yesterday as the market responded positively to definitive figures showing that All Progressives Congress (APC’s) General Muhammadu Buhari (rtd) would form the next government at the centre.
The upswing that started late last week as it became certain that Nigeria’s presidential and national assembly elections would hold as scheduled on March 28 rallied further on Monday as the market opened to news of early lead by the opposition candidate.
The market opened yesterday with a comfortable lead by Gen Buhari, a disciplinarian that has promised to reshape the national economy.
With 41 advancers to nine decliners, all indicators at the Nigerian Stock Exchange (NSE) showed positive outlook. Aggregate market value of all quoted companies at the NSE rose by N224 billion to close at N10.718 trillion as against its opening value of N10.494 trillion. The market had opened this week at N10.319 trillion.
The All Share Index (ASI), a value-based composite index that tracks prices of all quoted companies, rose by 2.13 per cent to 31,744.82 points compared with its opening index of 31,082.48 points. Investors staked about N5.05 billion on 379.45 million shares in 4,142 deals.
Meanwhile, capital market groups yesterday set agenda for a new economy by the incoming government.
The market groups including the Chartered Institute of Stockbrokers (CIS), Association of Stockbroking Houses of Nigeria (ASHON) and Association of Issuing Houses of Nigeria (AIHN) outlined strategic issues that the Federal Government must put in place as a matter of urgency to reposition the market for enhanced liquidity and capital mobilisation.
President, Chartered Institute of Stockbrokers (CIS), Mr Albert Okumagba said there were several opportunities for long term capital in the capital market, adding that certain things must be put in place to harness the opportunities.
According to him, the capital market can finance the entire infrastructural gaps if the government can deploy fiscal incentives to deepen the market by encouraging the companies in the telecoms, power, aviation, and oil and gas sectors of the economy to get listed on the securities market.
He said the core capital market operators are prepared to work with the government to ensure full utilisation of the capital market.
He also advocated for the development of commodity market to increase the number of tradable securities including futures and options derivative instruments on the underlying assets in the commodity market.
Chairman, Association of Stockbroking Houses of Nigeria (ASHON), Mr Emeka Madubuike said incentives should be given to listed companies and prospective companies to be listed so as to have some advantage over unlisted companies.
He said: “We propose some tax incentives for listed companies and those that are in the process of getting listed. Policies that would promote marketability of agricultural products should be enunciated and implemented to boost operations of the commodities exchanges.
“Governments at the highest level must continue to make positive statements and assurances that will engender investors’ confidence.”
Chairman, Association of Issuing Houses of Nigeria (AIHN), Mr Victor Ogiemwonyi urged the Central Bank of Nigeria (CBN) to strive towards reduction of the Monetary Policy Rate (MPR) to stimulate activities in the bond market.
According to him, government borrowing rate in the capital market should drop to avoid crowding out of funds and to make the market attractive for private sector to raise funds.
He said the government should revisit privatisation in order to allow for listing of government enterprises that are operating sub-optimally.
“The government needs to set up a capital market committee to work with the Bureau of Public Enterprises (BPE) to drive the process,” Ogiemwonyi said.
He promised the readiness of capital market operators to support the Federal Government in advisory capacity on how the capital market can be fully utilised to drive economic growth and development.
They group also called for regulatory support for the two existing over-the-counter (OTC) markets – National Association of Securities Dealers (NASD) and FMDQ platform to enhance expansion of their operations in the financial market.
They urged government to institute a national savings progamme through a comprehensive review of the rules and regulations guiding the Collective Investment Scheme (CIS) and amendment of all clauses that are affecting the operations of the National Pension Commission.
They called on the government to reform the operations of the mortgage institutions in order to fully integrate them into the capital market activities.