The depression suffered by the Nigerian capital market in 2016 has been described as a passing phase that is ushering in better opportunities and earnings for issuers and investors.
As they key in to take up advantages offered by the exchange, investors would not be subjected to suffer repeat of losses of 2016 as measures have been put in place to cushion such impact on the market and the investors.
This was the views of the president, Association of Stock Broking Houses of Nigeria (ASHON) Mr. Onyenwechukwu Ezeagu, who said recently in Lagos that the market performed poorly in 2016 because the economy that sustained the market also performed poorly during the year under consideration.
He said that as the economy is poised for quick recovery from depression, the same trend would be translated to the capital market as the only way for the market to go is up, gaining momentum in many fronts to boost offerings, diversification, debt and vibrancy.
Urging investors to take up earning opportunities in the market, he said “They don’t forgive easily and move on, but then that doesn’t possibly mean that it is the end of the story.” when you lose money, you have to go back to the drawing board to ask, how did I lose money. Brokers and investors have learnt a lot of lessons and there have been a lot of measure that have been put in place to ensure that the market doesn’t suffer that kind of loss again”
Capital markets tend to act as barometers of any economy, and in Nigeria’s case, the prolonged economic downturn directly impacted an array of products and asset classes on the Nigerian Stock Exchange in 2016.
The NSE ASI, capitalization, volume of traded stocks and value closed negative in 2016compared to 2015 primarily due spiral effect of the pressure on the economy by forex price uncertainty.
Ezeagu said that market failure in 2016,could not be seen as the end of the story, “the really issue is that the market is beginning to recover based on the policy direction of the government, all that the government is seen to be doing now is towards revamping the economy”
The ASHON President said that the federal government appears to have settled down to do the business that would lead to economic recovery, “and this is just because they may have realized the pitfalls of what they have done in 2016”.
He said that the signs of early economic and capital market recovery are contained in the 2017 budget of N7.3 trillion of which the budget details showed that enough expenditure would be carried out during the year to propel the market.
The stock brokers, according to him are better placed to key into the market recovery initiatives by ensuring that the right education and enlightenment is carried out to ensure that more vibrancy is returned and more investors make inroad into the market. “This is the only veritable, viable and creditable platform that you can see, you can trust”
Commenting on investor confidence and dearth of more local investors, he said that the people that have had terrible experience form their losses seem to have forgiven the market and revive their investment appetite.