The Association of Securities Dealing Houses of Nigeria says the Nigerian capital market now enjoys the confidence of local investors.
The Chairman, Association of Securities Dealing Houses of Nigeria, Sam Onukwe, said even though the foreign investors had left the shore of the Nigerian bourse, more local investors were participating.
Onukwe stated this in a statement titled ‘Key drivers of Nigerian capital market in 2023.’
“Local investors are developing confidence in the market but on the other hand, foreign investors left because they were losing money,” he said.
He noted that the global implications of the Russian invasion of Ukraine disrupted economic activities but the market didn’t do badly despite the challenges.
Onukwue identified some factors such as security challenges, inflation rate, taxation of market instruments, especially, Capital Gain Tax, a disincentive to investors, government’s management of debt, funding of budget deficit, privatisation of moribund parastatals among others to determine the investment environment and drive activities in the Nigerian financial market in 2023.
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In his review of the market for 2022, he noted that the above 20 per cent gain recorded by the NGX was commendable.
He added that the market would have earned higher but for the incessant review of the Monetary Policy Rate, rising inflation rate, and the inconsistent exchange rate that characterised investment activities in the review period.
He expressed optimism that a more stable monetary policy environment would enhance investment opportunities.
He said, “The financial market was unstable for the larger part of 2022 as some fundamental decisions were taken by the government that impacted the market.
“Constant movement of the Monetary Policy Rate forced investors to look for higher interest margins.
“The inflation galloped in the period and people were looking for real value. Exchange rate also constituted a challenge as foreign portfolio investors abandoned the market while local investors dominated the market.”
