By Yemisi Izuora-Lagos
The Nigerian Capital Market is currently facing some challenges that must be addressed in other to sustain the Market recovery and prevent another crash and adverse effect on the economy.
The group Chief Executive Officer of UBA Capital Plc Oluwatoyin Sanni said this while delivering a paper titled “Sustaining Capital Market Recovery” at the ongoing CAMCAM workshop which began today In Lagos.
She said that investor confidence must be restored now that the. General election is going to take place early next year.
She observed that some international and local investors have withdrawn their investments in anticipation of the outcome of the election.
Sanni further noted that the drop in oil price and perceived policy inadequacies also affected the international investors confidence adding that relatively low daily traded values and low turnover velocity are still a hindrance to large investors.
She added that the Nigerian Economy is greatly exposed to geopolitical, geo- economic and currency risk which is forcing foreigners to withdraw from investing, stressing that the insecurity in the country is also a challenge to the Nigerian Market recovery.
According to Sanni, the low financial literacy and low financial inclusion which also causes apathy to retail investors are also hindrances to the growth of the capital market, adding that the lack of diversification options as few products are available and financial sector still dominates the trading activities also affects the growth of the market.
She also said that the Nigeria PFAs currently have limited exposure to equity market adding that PFAs have the opportunity to greatly increase their equity exposure as this will increase long term returns to contributors, encourage the IPO market as there will be an increased absorption capacity and improved liquidity.