‘How Nigeria can stimulate stock market investment, boost liquidity’
Investors have urged government to promote national savings culture through the provision of appropriate incentives that would ensure more patronage by retail investors’ and increase investment in the market, As liquidity constraints persist in the stock market.
According to them, part of the current decline in the market was due to sell down by foreign investors, due to uncertainties that now surround the macroeconomic environment, especially the approaching 2019 polls.
Indeed, they stressed the need to generate more savings within the country through forced or incentivized voluntary measure to substitute foreign capacity.
They argued that market stability could only be achieved through improved long term saving, noting that increased savings would also accelerate development and bolster the economy.
Specifically, the President, Constance Shareholders Association, Shehu Mallam Mikail, argued that long-term savings will spur activities in the primary market segment and accelerate economic growth, noting that the level of savings in an economy has a multiplier effect on its investment.
Mikail pointed out that government should introduce the right incentives to encourage more people to save on a long-term basis and spur investment activities in the market.
Furthermore, he said it is desirable for government to seek how to moderate the influence of foreign portfolio investors in the Nigerian capital market by boosting increased domestic participation in the market.
The Chairman, Integrated Supreme Shareholders Association of Nigeria, Owolabi Peter,Lao said there was need for market participants to explore various mechanisms and mobilise savings in order to boost liquidity in the market.
“The market is nose-diving now because there is no liquidity. There is no support for the market again because of illiquidity. There is a need for a proper national savings plan that would enable people put money aside for investment and be sure they will get some kind of incentive that would make them take up that policy. We don’t have good savings culture and we need to develop one,” he said.
An independent investor, Amaechi Egbo, explained that if there were no savings, there would be no investment.
He argued that Nigerian workers need to embrace the culture of savings in order to provide more viable exit plans in the face of voluntary or compulsory disengagement.
He added that these savings would be channeled to stock market where the individual can monitor the movement and performance of the stocks and take appropriate investment decision.
“ It is a culture that needs to be developed and once it is developed in Nigeria, we will have enough savings and can now channel these savings to investment in the capital market and other areas of the economy.
“We advice professionals and other workers to invest in the stock market where they do not need any body to monitor their investment. They can monitor their investment by themselves.”
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