By Chioma Obinagwam
Some stakeholders of the Nigerian Capital Market have called on the National Assembly (NASS), Nigeria’s legislative arm, to probe the performance of the Nigerian Capital market.
The stakeholders who are shareholders under the aegis of Renaissance Shareholders’ Association of Nigeria argue that it is not reflective of the fundamentals and performance of most listed companies.
The chairman of the association, Olufemi Timothy said that the volatility and the downward trend witnessed intermittently by key measurement indicators of the capital market since the beginning of the year is a reverse of the real picture of the health of most of the listed companies.
“You see, it is an issue we have discussed at length at the National Assembly. The market is not reflective of companies performance at the capital market,” he disclosed.
“The capital market is running on its own without consideration of the fundamentals. The capital market is not reliable. You can’t rely on the stock market price for now,” he continued.
He stated that his association is asking the government through NASS to make the capital market more realistic.
He said: “You can see from the companies 2015 results that was just released that the presence of the government has not been felt by these companies.”
He noted that as at the time he spoke with our correspondent, about 33 listed companies had declared dividends, which according to him is reflective of good health of these companies.
Meanwhile, the equities segment of the capital market, which is coincidentally, the most patronised has been the most hit by the trend.
According to the weekly report of the Nigerian Stock Exchange(NSE) for the week ended April 1, 2016 showed that the NSE All-Share index had already shed 10.95 per cent year to date(ytd).
Furthermore, the report for the period under review revealed that The NSE All-Share Index and Market Capitalization depreciated by 1.52 per cent to close the week at 25,507.09 and N8.774 trillion respectively.
The All-Share index is a series of numbers which shows the changing average value of the share prices of all companies on a stock exchange, and which is used as a measure of how well a market is performing.
Recall that the NSE Chief Executive Officer(CEO), Oscar Onyema, earlier in the year, had predicted uncertainty and volatility the New Year (2016) and beyond as Nigeria struggles with commodity price shocks and the resultant impact on the Naira.
Nevertheless, he was quick to add that the Federal Government could still leverage on the resources from the capital market to fund its budget deficits.