Business
200bn bail-out fund is expediently auspicious – Ezeh
By Chioma Obinagwam
A bail-out fund for the capital market has been said to be long overdue in the face of declining metrics of the market.
The Managing Director(MD) of Crane Securities, Michael Ezeh said in a mail interview.
According to him, the Capital market is the engine of the economy but frowned at government’s defiance towards this clamour for the intervention fund.
“The clamour for a bail out fund for the capital market is not only timely but expediently auspiscious and long overdue at this time.
The market has been comatose since 2008 and ever since then we have been clamouring for this intervention fund,” he stressed.
“Other sectors have received various degrees of intervention even though they do not need it as much as the capital market i.e aviation,agriculture,textile etc but despite our clamour for an intervention fund in the market, government has extended an ‘I don’t care’ attitude to the issue,” he continued.
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Recall that the Nigerian capital market has recorded a consistent decline since the beginning of the year 2016.
In fact, data derived from the Nigerian Stock Exchange(NSE) weekly report for the period ended February 26, 2016 showed that the NSE All-Share Index, a major metric for assessing stocks performance, had already lost 15.41 per cent year to date(February 26, 2016).
Although adverse macro-economic situation largely due to a drastic drop in the price of oil, negative public sentiment which is related to the state of the macro-economy, retreat of foreign portfolio investors which is related to CBN policy on foreign exchange, have been blamed for the lull in the market, not much has been done by the government to reverse the trend.
Mr. Ezeh also recalled that previous governments even said that the capital market is a private sector initiative and that government has no business intervening and was quick to state that it would help in reinvigorating the market.
“What we have seen in Nigeria is that our economy has wobbled ever since 2008.
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This fund though not adequate,will go a long way towards awakening the market and by extension,the Nigerian economic system which has also been affected ever since,” he continued.
Nevertheless, despite this clarion call by stakeholders the Asset Management Corporation of Nigeria (AMCON), recently stated that it was not considering another bailout for stockbrokers in line with recent calls by the stockbroking community.
The bail-out fund, according to the Chartered Institute of Stockbrokers(CIS) is expected to be created by the Federal Government via the Central Bank of Nigeria (CBN) of an intervention window of about N200 billion to be accessed by market makers to shore up the market.
They added that each market maker should be availed with between N1billion to N10 billion to help them carry out their function effectively.