COVID-19: Capital market in dire need of lifeline - The Nation Nigeria

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COVID-19: Capital market in dire need of lifeline

No thanks to the outbreak of the novel coronavirus , records from the first half of the year shows that the nation’s capital market has experienced anything but boom lately if the regularity of losses and declining investment within that space is anything to go by.Nigeria’s economy is in dire straits.

However, surprisingly the performance of the stock market in April 2020 was positive. The market performed with a gain of 8.08 percent to close the month of April at 23,021.01 points, from an opening level of 21,300.47 points at the beginning of the month. In terms of market capitalisation for the period, the value was up by N896 billion as at April 30, 2020, from an opening value of N11.101 trillion on April 1, 2020, to close at N11.997 trillion.

Experts also charged that rather than see the market perpetually closing on negative notes, adequate government policy response is recommended to immediately cushion the effect of the pandemic. Regulators in the capital market, as a matter of urgency need to propose to the government, direct policy responses to cushion the effect of the Covid-19. This is imperative because most of the SMEs and companies listed have experienced supply chain disruption and depressing investment climate.

For financial assets to commence their migration to the equities market, fundamentals of the economy must improve remarkably, he stressed, adding, “If government wants equities to become vibrant as profitable investment outlet and to facilitate capital formation for the real productive economy, the focus should be on speedy revival of the economy.”

“Right now, as we speak, I’m trading, which is to say, that despite the situation in the country and worldwide, the operators in the market are still operating. Customers can still buy and sell, issuers can still raise funds and we are all trying to adapt to the new norms, which is trading online. I must give kudos to the Nigerian Stock Exchange and other players in the market for introducing the system and plans to move ahead.

 

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