…says fiscal incentives by FG is key
An economic expert, Professor Uche Uwaleke of the Nasarawa State University, Keffi, has said that there would be improve activities in the Nigerian capital market in 2021.
Speaking with financial journalists on “Nigeria’s Capital Market in 2021:Opportunities and Risks”, he said fiscal Incentives by the Federal Government and enabling regulations by Capital Market regulator the Securities and Exchange Commission is key.
Uwaleke acknowledged the bullish performance of the Nigeria Stock Exchange at the end of 2020, closing with a year-on-year growth of 50.03 percent and achieving a 40,270.72 basis points value.
The markets growth was ascribed to the pro-growth monetary policies of the CBN, the raising of the banks loan-to-deposit ratio (LDR) and maitaining a low-interest rate regime which affected fixed income market yields and led to a renewed appetite for equities.
He was optimistic that the CBN would continue its accommodative monetary policy in 2021 which would see low yields in the fixed income market and increased activities in equities.
He noted that a stable macro-economic environment was vital for the economy and Capital Market to gather momentum and achieve value creation.
According to the capital market specialist, strong fiscal incentives should be in place to encourage more activities in the equities market, especially in formalizing the informal sector like agriculture, which may see more companies in agri-business being listed on the NSE.
He noted that currently the NSE has about 166 companies listed on its trading floor a number that needs to improve in 2021.
On the demutualization of the NSE, Professor Uwaleke lauded the move believing that it would help to improve corporate governance, increase capital formation and enhance global visibility and competitiveness for the Exchange.
Reviewing the debt market Uwaleke stressed that only states that have steady internally generated revenues (IGRs) and healthy debt profiles should access the market alongside private companies.