Investors Record N675B Loss IN One Month 

THE delay in the formation of Federal cabinet, 47 days after the inauguration of the present is causing a lull in economic activities in the country, especially the capital market.

The lull is as a result of lack of policy direction on the part of the government and skeptical investors are not willing to invest, because of fear of uncertainty.

Apart from the delay in putting in place the Federal cabinet, the lingering crisis at the National Assembly has worsened the situation with multiplier effects on investment at the nation’s capital market. The president was inaugurated on May 29, 2015 and few days after the ceremony, the market witnessed a significant recovery, only to witness a downward slide two weeks after.

As at June 15, 2015, market performance recorded an unprecedented lull, as it declined by N675billion or   5.86   per cent, from N11, 510 trillion to N10, 835 trillion as at Friday, July 10, 2015 while the All-share index went down by 1990.09 or 5.90 per cent, from 33,719.45 to 31,729.36.

Reacting to the development, the former President, Chartered Institute of Stockbrokers, Ariyo Olusekun attributed the lull to the delay by the president, in the announcement of key cabinet appointments and the failure to make necessary policy statements.

According to him, few days after the inauguration, the market witnessed some level of stability, even as many stocks appreciated in price within the period. However admitted that the uncertainties that shrouded the market recently affected the movement of stocks in the market.

“It has affected recovery of the market. Since the election, there had been optimism and it is that optimism that stabilized the market, but the market is supposed to have improved beyond the current level, but investors are waiting to know the policy direction of government, in terms of the economy. When you are not making appointments and you are not coming up with any policy pronouncement, there will be a lot of uncertainty because people do not know which way to go.

“This is affecting the movement of the market. You know investors; whether local or foreign, they will not invest where they are not sure of the economic direction of the country. So it is important that the government takes off quickly.

“Yes we understand that the National Assembly is on recess, but before the resumption, government should start making pronouncements in terms of policy on economic direction for investors to know which way the government intends to go.

When the ministers are appointed, they would pursue the course because once people know the way government is taking; they can take a cue from that and make their investment decision.”   To the Managing Director, NASD OTC PLC, Bola Ajomale, the delay has affected every sector of the economy, not only the capital market.

“It has affected everything in the economy; it is affecting the port, general commerce, importation and exportation. So it is natural that it will affect the capital market as well. If you don’t have people at the helm of affairs, there is possibility that things will be drifting. We are already at the stage when it seems things are drifting.

The earlier we have direction, the better because a lot can happen with signaling. You can signal to the rest of the world that we have a direction we are going, and then the people will identify with those charged with the responsibility of moving us to where we are going and things will become better.”

Also speaking on the issue, the Managing Director, Partnership Investment Limited, Victor Oguiemwoghen said: “If there is any anticipation, there will be anxiety to see what the cabinet will look like.

This creates uncertainties that will make people delay their investment decisions. They will not make decisions until they are clear about government’s policy direction.

So there are lots of people who are waiting to see what the government will look like. The most important thing is that the cabinet should be inspiring. If you find the right people at the cabinet, the market will respond positively.”