Sections
Poll: Power pledge
Is Mr. President's promise of additional 6,000 MW of electricity in 18 months achievable?
NSE dismisses speculation on stock market crash
Font size:
Okereke-Onyiuke
Director General of the Nigerian Stock Exchange (NSE), Ndi Okereke-Onyiuke has assured investors of the capability of the Exchange to sustain returns on listed securities.
She said that the assurance became imperative because of the speculation of an imminent crash of the Nigerian capital market by pessimists.“Our capital market can not crash because the fundamentals in terms of price, capacity for growth, listed companies’ potential and the economic horizons are all in favour of the market,’’ Okereke-Onyiuke said.
Reviewing the activities of the market in 2007, on Tuesday in Lagos, the director-general said that the capital market had not absolved one-quarter of its capacity for securities.
At present, 310 securities, comprising 212 equities and 98 bonds, are listed at the NSE.
Okereke-Onyiuke explained that other issues strengthening and guaranteeing safety of investments were operations of high market discipline, zero tolerance regulation and the emerging character of the NSE.
She said that contrary to other views about the exchange outpacing the economy in the last few years, the tremendous market growth in 2007 was attributable to dividends of consummate economic reforms.
The other larger positive economic indices which had impact on the capital market, according to her, are high lending rates in the money market, improved macro-economic performance, profit-taking and stock-switching by investors.
She said that about six million investors in the emerging capital market cumulatively earned 74.73 per cent as returns from investments, during the period under review.
The returns were influenced by increased awareness of the stock market, improved operating results and large available float by banks and insurance companies, she said.
She adduced other reasons to sustained inflow of pension funds and low interest rates on deposits in the money market.
A breakdown of market-based activities in 2007 shows that NSE was also highly attractive to foreign investors who staked N256 billion or 12.3 per cent of the turnover compared with N35 billion achieved in 2006.
Okereke-Onyiuke, who described NSE as
one of the fastest windows of foreign direct investments, also attributed foreign investors’ high appetite in Nigerian-quoted companies’ shares to their confidence in the Nigerian economy.
Overall, the market turnover shows a growth of N2.1 trillion or 19.5 per cent of the nation’s gross domestic product (GDP) in 2007 compared to N470.25 billion recorded in 2006.
Equities accounted for the bulk of the transactions’ turnover with N2.08 trillion or 99.86 per cent, up from 99.6 per cent recorded in the previous year.
The Industrial loans sub-sector also accounted for N2.87 billion or 0.14 per cent of the market turnover in 2007.
The Federal Government development stock and preference stocks sub-sector in the period remained inactive with only N1.6 billion turnover.
A further breakdown also shows that high net worth individuals and corporate investors in 2007 were preferred to over the counter (OTC) market.
This is because the Federal Government listed bonds recorded a turnover of N4.13 trillion in 30,182 deals compared with N624.81 billion achieved in 5,448 deals in 2006 .
Add to:
del.icio.us |
Digg
del.icio.us |
Digg
Email to a friend
Print version
Plain textRate this article
Comments ( posted):
Post your comment