Chinwendu Obienyi
Capital Market Operators (CMOs) have called for the suspension of plans by regulators to recapitalise stockbroking firms, urging the Securities and Exchange Commission (SEC) to consider current economic realities posed by the COVID-19 pandemic.
This was even as they urged the Federal Government to treat the capital market as a priority sector in terms of pandemic alleviation strategies.
President, Chartered Institute of Stockbrokers (CIS), Tunde Amolegbe, made this known at a webinar organized by the Capital Market Academics of Nigeria themed: “Mitigating the Impact of COVID -19 on the Capital Market.”
Amolegbe explained that the pandemic had slowed down NSE demutualisation programme and added that the implication of this will thus be a possible aggravation of the funding challenge of the CIS.
Given its level of importance, he believed that the Federal Government should treat the capital market as a priority sector in terms of pandemic alleviation strategies.
“In view of existing major constraints regarding trading liquidity, the Central Bank of Nigeria should formulate policies that will drive more liquidity into the hands of CMOs, especially equity traders,” he said.
He added that the stability and growth of the equity market would eventually lead to an overall market rebound as well as growth in the economy.
The CIS president also emphasised the need for the launch of a derivatives market required to hedge investments at a period of heightened risks such as COVID-19 pandemc, adding that the Nigerian capital market has been hamstringed even before the pandemic challenge.
“The equity market, which drives performance of the other market segments had been characterised by low investor patronage and low liquidity ever since the global financial crisis that hit Nigeria in 2008,” Amolegbe said.