Pioneer Nigerian Professor of Capital Market Studies at the Nasarawa State University, Keffi, Uche Uwaleke, has raised the alarm over what he described as over exposure of the Nigerian Capital Market to foreign portfolio investors.
Describing their appetite for investment as ‘hot money’ in connivance with a few local investors, he cautioned that the development was a threat to deepening the Nigerian capital market and its role in the country’s economic development.
He made the observation yesterday at the inauguration of Prof. Uche Uwaleke Colloquium on the Nigerian Capital Market with the theme: Fiscal And Monetary Policies For Deepening The Capital Market In Nigeria in Abuja.
He insisted that the market as currently composed, was tied to the apron strings of foreign investors so much so that “if they sneeze, the market catches a cold.”
Uwaleke, therefore, appealed to the Central Bank of Nigeria (CBN) to initiate policies that could rescue the market from the stronghold of the foreign investors as well as the few local investors by broadening the domestic component.
This, he argued, would protect the market from an impending shock and consequences should the foreign portfolio investors change their investment decisions or in case any unforeseen eventualities happen to the few dominant local counterparts.
Speaking, Chairman of the colloquium and former Director General of the Securities and Exchange Commission (SEC), Suleiman Ndanusa and other panelists sought enduring policies to engender growth, which could lead to the inclusion of many locals to participate in the country’s financial market.
In his remarks, Deputy Governor, Economic Policy of CBN, Dr. Joseph Nnanna, who was the Special Guest at the Colloquium, explained that the development in the capital market was due to the economic situation in the country.
Also commenting demands to relax CBN’s policy tightening, he gave reasons why rates would remain high, adding: “The reduction of key interest rate-Monetary Policy Rate (MPR) at this time would throw up a cocktail of fiscal challenges in the economy and create more inflationary pressure.”
