The federal government says it will institute policies that will help restore the fledging nation’s capital market back to its past glory and make it the investment destination for wealth creation in the country.
President Goodluck Jonathan who stated this yesterday during the 50 years anniversary commemoration of trading on the Nigerian Stock Exchange (NSE), said while businesses in the domestic economy were presently centered around public oriented establishment, the next 50 years considering what the present administration was putting in place, would majorly be driven by the private sector.
The President who was represented by Vice President Namadi Sambo, reiterated that since trading began on the floor of the Stock Exchange, the capital market had been a major catalyst for economic growth and development in Nigeria, and urged operators in the market to examine how best to effectively leverage the capital market not only to boost the economy, but to drive the nation’s national transformation enterprise.
“This will no doubt be enhanced as our administration pursues definitive policies and programmes to transform the business environment and unleash the entrepreneurial zeal of Nigerians.
We are committed to vigorously pursuing those policies which will have effect of strengthening the investment climate and engendering the requisite environment for Nigeria’s effective engagement with the global economic community,” he said.
The NSE’s 50 years trading anniversary which came up with much funfair yesterday, saw the Exchange vicinity barricaded with heavy security operatives and this was coming barely nine months when the Exchange celebrated its golden jubilee.
Also speaking, Lagos State governor, Babatunde Raji Fashola said the success of the electoral process in the country has further given credence to the stability of the economy and that this would in no due cause bring the much desired foreign investment into the economy.
He said the expansion of the market depended on the capacity and quality of listed companies, noting that to have quality output, “I promise to continue to invest in infrastructure that would enhance business growth and development in the State.
“However, the market must demonstrate an enormous flexibility to grow from the present state it has found itself by way of listing entertainment and sports.
In his remarks,,
the Interim President of the Exchange, Mallam Ballama Manu, said the Exchange has witnessed tremendous growth in the last 50 years in terms of volume of trade and its operations.
He said that operationally, the market which started with the call over system has since 1999, migrated to automated trading system, adding that the market has not optimally functioned as a barometer of measuring the economy due to the absence of major sectors of the economy on the market.
According to him, the telecoms and the Oil and Gas sector are excluded from the market and most of the international companies that operate in this sector are listed in their home countries and generating sufficient wealth and growth momentum for their local economy.
Manu who expressed misgiving with listed of a part of some the multinational companies said “this disconnect between these sectors of our economy and those traded on the stock market makes international investors uncertain about investing in our stock market.
He called on the Federal Government to repackage the FGN bonds for trading on the Nigerian Stock Exchange to encourage participation by retail investors.
Manu noted that retail investors are currently excluded from trading in the FGN bonds due to their smaller financial muscle adding that the exchange has commenced discussions with relevant agencies of Government to find a structure that would accommodate them.
“We are aware that listing on any exchange is not by compulsion and that The Exchange needs to have the highest level of integrity and invest in people, processes and technology to achieve durable wealth creation and market leadership.
We are delighted to inform you that in this respect, we are progressing with a major transformation that will enable us to once again play a pivotal role in the economic development of this country,” he said.
Manu noted that the exchange is poised to achieve its aspiration of becoming the gateway to the African frontier markets, adding that significant investment is being made to improve its operational efficiency, through the introduction of new products and leveraging on latest technology.
“We are also actively engaging our broader stakeholder groups to re-build the much needed market confidence.
Significantly the Council which I have the privilege of chairing, has just approved the commencement of actions and steps that will lead to an eventual demutualization of the Nigerian Stock Exchange,” he said.