Capital market operators have condemned feeble and inconsistent policies operating in the nation’s capital market.
Speaking at the launch of the Investors’ and Exporters’ Forex windows at the Nigerian Stock Exchange recently, the operators said that the positive rally witnessed in the nation’s equities market last week might not be sustained unless government implemented policies that would stimulate the macroeconomic environment and improve liquidity in the market.
Analysis of the market performance last week showed that it was the best recorded in the last two years, as market indices appreciated by 7.68 per cent.
The last time the stock market recorded such improved performance was in the week ending April 2, 2015, when the index closed with a week to date gain of 18 per cent, valued at a whopping N2 trillion.
Some analyst attributed the growth to foreign investors, who are taking position hoping that the country is working towards stabilising the forex market and the dividend payout from listed firms for the 2016 financial year.
However, they maintained that without favourable monetary and fiscal policies from government and other positive macroeconomic variables, the positive sentiments might not continue and the market would not achieve sustainable rebound.
At the close of transactions last week, the All Share Index appreciated by 1,956.83 points or 7.46 per cent to 28,192.46 points, while yearto-date gain increased to 4.90 per cent.
Also, the market capitalisation increased by N676 billion to close at N9.746 trillion.
On whether the positive sentiments would be sustained, an investment analyst, Higo Aigboje, said most of the companies did well in their third quarter performance, while expressing delight over the week on week rally in the market.
He, however, stressed the need for investors to be cautious while taking position.
“Appreciation in the market numbers week on week is good for the entire market players, but we have to remain optimistic cautiously going forward as the closing are a prudent of mix sentiments and positive macroeconomic variables and outlook.
The government needs to do more in the area of friendly policies and ensuring that budget funds released for various sectors are judiciously implemented.
“We expect the market to experience some slowing down declines, depending on whether players see value on prices of equities and Q2 and Q3 performance of listed firms.
Ultimately, sustainability will depend on reassuring mix of government monetary and fiscal policies positive in macroeconomic aggregate and action of the regulators,” he said.
The President, Proactive Shareholders Association, Taiwo Oderinde, said that the appreciation recorded in the market last week might not be sustained.
“I believe this is as a result of companies declaring dividend for 2016.
Even international rating agencies predicted that it cannot be sustained. When quarterly results are coming out for 2017, and the result of 2nd quarter and others cannot surpass that of 2016, the phenomenal growth will not be sustained. The best we can have is linear growth,” he said.
