no respite for investors. But more worrisome is that in the near term, the outlook remains uncertain, an indication that the search for respite by stakeholders may not come sooner.
IMF said the forecast is influenced by the larger than expected storms to global value chains due to the coronavirus, affecting global demand for goods and services. As such, Nigeria is currently experiencing the effects of its overdependence on oil, and underinvestment in infrastructure.But experts at the weekend insisted that there is a nexus between infrastructure development and capital market growth.
“There is the need for more investments in power generation and distribution as well as communication and port development if the capital market is to grow faster. The 2020 budget has been severely affected by COVID-19 pandemic requiring adjustments, which did not really affect funds allocated to infrastructure.
This translates to a yearly investment of N36 trillion. Unfortunately, the entire revised FGN Budget for 2020, is a mere N10.5 trillion, a far cry, at just 29 per cent of the estimate, even if all of it goes into infrastructure. A Professor of Capital Market and Head of Banking and Finance Department at the Nasarawa State University, Keffi, Uche Uwaleke, at the weekend, argued that stock market tends to perform better in any year the government spends more money on CAPEX compared to when it is lower.
This is despite impressive earnings and dividend announcements by listed companies. For instance, the tier-1 banks with an acronym- FUGAZ, which is First Bank, United Bank of Africa , Guaranty Trust Bank , Access Bank, and Zenith Bank returned double-digit returns at the end of the 2019 and 2020 financial years.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: LeadershipNGA - 🏆 4. / 77 Read more »