Apparently irked by the illiquidity constraint that currently besieged the stock market, investors have urged the 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.
According to them, part of the current nosedive in the market was due to sell-down by foreign investors, due to uncertainties that shroud the nation’s economic outlook, occasioned by insecurity, kidnapping and recurrent farmers-headers clashes.
Indeed, they stressed the need to generate more savings within the country through an incentivised voluntary measure to substitute foreign capacity.
They argued that market stability could only be achieved through improved long term savings, noting that increased savings would also accelerate development and bolster the economy.
Specifically, the President, Issuers and Investors Alternative Dispute Resolution Initiative (IIADRI), Moses Igrude, argued that long-term savings would 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.
Igbrude pointed out government must introduce the right incentives to encourage more people to save on a long-term basis and spur investment activities in the market.
In addition, he noted that it is desirable for government to seek how to moderate the influence of foreign portfolio investors in the Nigerian capital market by increasing domestic participation in the market.
The Chairman, Standard Shareholders Association of Nigeria, Godwin Anono argued that there was also a 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 to put money aside for investment and be sure they get some kind of incentive that will make them take up that policy. We do not have good savings culture and we need to develop one.”
An independent investor, Amaechi Egbo explained that if there were no savings, there would be no investment.
“In basic economics, if there are no savings, there will be no investment. So people are encouraged to develop a savings habit. Saving should be a habit. If you pay me one million naira, if I cannot save, if I am paid N10 million, I cannot save also.
He argued that Nigerian workers needed 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 channelled to the stock market where the individual can monitor the movement and performance of the stocks and take an 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 invest in the capital market and other areas of the economy.
“We advise professionals and other workers to invest in the stock market where they do not need anybody to monitor their investment. They can monitor their investment by themselves.”
