Urge local investors to increase stake in nation’s bourse
Participants at the Central Securities Clearing Systems (CSCS) 2016 Economic Outlook have urged government to take appropriate decisions that would help restore investors’ confidence in the stock market.

Besides, they stressed the need for retail investors to leverage the low price of equities in the stock market to increase their investment.

Specifically, the Chief Executive Officer of Cowry Asset Management, Johnson Chukwu maintained that the stock market rebound depends on the policy decision of government.

He argued that the market is suffering not because the fundamentals of the quoted companies have failed but rather because the economic policies are not clear, so investors, both local and foreign ones, have decided to stay at a sideline.

“If government takes appropriate decision, the market will rebound. The market is suffering not because the fundamentals of the quoted companies have failed but rather because the economic policies are not clear so investors are staying on a sideline to while away for government policy direction.

‘’ So if the policies are appropriate, investors will come back to the market. One of the key challenges that are holding back the market is the exchange rate, which the government needs to address.

“ I am hoping that the Monetary Policy Committee (MPC) will look at that and debate on that because that is one of the key challenges we are having today. If they are going to come up with policies, they should initiate policies that are sustainable and not policies that are basically in silos if the policies are not sustainable then they are not policies”, he argued.

An economist and investment analyst, Biodun Adedipe argued that with the persistent volatility witnessed in the Nigerian stock market in the last few years, causing the market to decline by over 33 per cent, there was need for increased local investors participation in the market, noting that if the local investor fail to take position now, foreign portfolio investors would continue to dominate transactions in the Nigerian Stock Exchange (NSE) even in the next quarter.

He however, maintained that government must begin to apply the principles of all-inclusive growth where policy choices must align with monetary, fiscal, trade and investment, which, according to him, would spur activities in all the sectors including the stock market.

Adedipe , however, added that local investors should ensure that their investment in the market are made on a longer-term perspective rather than short term.

“The stock market has remained volatile, declining by over 33 per cent in the last two years. Most stocks have dipped more that 50 per cent within the last two years, thereby making their prices to be affordable. There is no better time to invest in stocks than now. Most of the prices have hit the bottom.

“Happily, the economy has started on recovery, based on Q3 2015 data from the National Bureau of Statistics released early in December 2015. And given the a clear linkage between this year’s budget and the economy and what is required to get it working, the economy will become stronger and by then the market will begin upward movement. So, for any wise investor, this is the beast time to invest and wait for the upward movement in prices.

“Whatever policy choices must align with monetary, fiscal, trade and investment together and must be executed. We want to grow our economy in an inclusive basis.” he said.