Stockbrokers Identify Bane Of Nigerian Capital Market

The Chartered Institute of Stockbrokers (CIS) on Tuesday said that the N300 billion ‘ debt of dealers was impeding successful resolution of the crisis in the capital market.

The President of the CIS, Mr Michael Itegboje, told newsmen in Lagos that the market would not be revived “if government refuses to address the capital market debt overhang’’.

He said that the market making initiative of the Exchange would not work if the poor liquidity in the market persisted.

Itegboje said that the growth experienced in the market before the global financial crisis was a function of strong liquidity provided by banks to both investors and dealers.

He said that the growth and rekindled investor confidence in the market being anticipated by the regulators would not happen without addressing the debt problem.

The stockbroker said that as major market players, CIS members were shocked at the scant attention the Ministry of Finance paid to the forbearance package.

According to him, the scant attention to the debts of dealers showed that government was only paying lip service to operators and investors huge losses.

Itegboje advised government to provide the needed leadership in resolving the nation’s capital market crisis by listing the Bank of Industry, Federal Mortgage Bank of Nigeria and other government-owned commercial concerns.

He said that the listing of these organisations would enhance their financial independence and free national resources to develop other areas of the economy.

The CIS president said that government agencies would perform better as quoted companies.

“If we cannot develop the agriculture sector, we cannot have real development in other sectors of the economy,’’ he said.

Itegboje said that the country would have problems when the oil wells dried and advised that emphasis should be on revival of agriculture and the real sectors.