Signing of Budget is good for the stock market, says CIS boss
The signing of the 2016 Budget by President Mohammed Buhari has been described as a positive development, not just for the capital market but the economy as a whole.
Adedeji Ajadi, Registrar/Chief executive, Chartered Institute of Stockbrokers (CIS), who made this known to The Guardian, said: “It is a signal of the commencement of activities that will energize the economy.
“Remember the government is pursuing an expansionary fiscal policy, which promises rapid and catalytic growth. This should bring back confidence into the capital market immediately.”
It would be recalled that the delay in the signing of the Budget has put economic activities in the country and investment in stocks at a standstill. Investment experts, who drew a contrast between early budget passage and the reversed case, said the real sector operators are usually the first to get the hit and heat.
According to them, every organisation involved in production, import and export, with huge numbers in its employ, would always want to know the direction of government at the beginning of each year to guide its own budget, but where that is not forthcoming, the fastest signal will be “uncertainty.”
“The delay will only increase the level of uncertainty. The earlier, the better and a guide to business projections and internal planning as well. This is a general situation to all real sector operators, because no business operates without budget, but the government’s own will show the direction to which sector in the economy to investment in, not only by local operators, but also those who want to come in from abroad,” the Managing director, Red Star Express, Sule Umar Bichi, stated in a report.
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