Capital Market Featured

Yuletide: Capital market operators foresee persistent sell pressure in equities

Ahead of the forthcoming Yuletide season, some capital market operators on Tuesday said that sell pressure would likeky persist on the nation’s bourse in November and December.

They spoke in Lagos on market expectations in the last two months of 2019.

They anticipated that investors in preparation for the festive season would offload and sell down to meet up with their basic expenses.

Mr Moses Igbrude, Publicity Secretary, Independent Shareholders Association of Nigeria (ISAN) said that the forthcoming festivity would further affect the market negatively.

Igbrude said that there was need for government to put the right polices in place especially tax incentives, infrastructure and overall improved economic situation of the country to change the trend.

“There will not be much difference between October and November stock market indices because normally, towards the festive season every year, people tend to offload and sell down to have money for their expenses.

“That is the general trend and I do not think that there will be any difference from that this year,” Igbrude said.

He attributed the lull in the equities market to the operating environment as well as monetary and fiscal policies.

On border closure, Igbrude said that it would force people to patronise locally-made goods and as well create an enabling environment for manufacturers to operate.

He, however, stressed the need for the government to do more in providing infrastructure, to reduce cost of production.

Igbrude called for improvement in provision of stable electricity supply, water and security, to reduce operating costs of companies.

“Let government provide all these infrastructure so that those monies will be deployed to other areas; that is where government should focus on to enhance the economy.

“The capital market is the major barometer to measure the economy, so investors must be given incentives, tax rebate for companies that are not doing well, to encourage companies to do more,’’ he said.

Dr Boniface Chizea, the Chief Executive Officer, BIC Consulting Services, said that the market would likely maintain southward trend as the year runs out due to lack of triggers to boost investor confidence.

Chizea said that drop in the country’s foreign reserves was discouraging international investors from investing on the Nigerian Stock Exchange (NSE).

“Stock market is the nearest barometer to measure the health of the nation’s economy and so once things are not going the way it should, investors, especially foreign investors, will stay off.

“They are very sensitive and monitor the trends much more closely than local investors do, and as soon as they feel that the risk factor of the environment is increasing, they try to readjust.

“Once your indices are moving southward, it means people are taking their monies out,” he said

Mr Shehu Mikail, National President, Constance Shareholders’ Association of Nigeria (CSAN) said that the trend in the Nigerian Capital Market was not different from other parts of the world.

Mikail said that government had to handle economic policies to catalyst growth and development.

“The capital market in Nigeria is of no different with other markets globally, it just depends on how government is able to handle the system of policy to make the economy system viable and sustainable.

“Currently, the regulators are putting all their best to see that transparency and accountability are being adhered to on daily basis but government needs to improve security, welfare and essential infrastructural facilities to encourage interested investors.

“Likewise, the system of tax implementation should be addressed because failure to do so has resulted to multiple taxation in Nigeria.

“Therefore, if our government can look into all these issues of policy implementation our Capital Market shall be a toast to investors,’’ Mikail said.

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