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<\/a><\/p>\nKayode Ogunwale<\/p>\n
27 December 2011<\/p>\n
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Lagos \u2014 The Managing Director and Chief Executive Officer of Cowry Asset Management Limited, Mr. Johnson Chukwu has welcome the ideal of House of Representative for investigating the cause of Nigeria capital market meltdown.<\/p>\n
“The decision of the House of Representative to mandate its Committee on Capital market and institutions to carryout thorough investigation to identify latent and manifest problems that are militating against the smooth operation of the capital market is good to the extent that it may add to the body of knowledge on the causes and solutions to the protracted Nigerian capital market crises,” he said.<\/p>\n
In an interview with Daily Trust, Chukwu said most of the causes and solutions have been well documented.<\/p>\n
He said the intervention by the lawmakers may be more effective if they focus on encouraging the different agencies and institutions with already defined responsibilities for repositioning the capital market to discharge their duties timely.<\/p>\n
He was a complete resolution of the margin loans debacle, which has constraint most Stock broking and Asset Management Companies from investing in the market. He said the responsibility for this resolution lies with the Federal Ministry of Finance, AMCON and CBN.<\/p>\n
He said the current high interest rate regime is a major disincentive for fund managers to invest in the equities as money market instruments are clearly more attractive.<\/p>\n
An analyst with Deloy Consulting, Mr. Tunde Oyediran said that the market situation has become too serious to attract National Assembly attention.<\/p>\n
He said the operators have suffered and are still sufferings but what the government don’t know is that they will suffer it most.<\/p>\n
“When company is in dare need of capital and cannot access stock market for such capital it has negative implication to Gross Domestic Product (GDP) and national output,” he said.<\/p>\n
The House of Representatives recently mandated its committee on capital market and institutions to carry out a thorough investigation to identify latent and manifest problems that are militating against the smooth operation of the capital market.<\/p>\n
The resolution to probe the capital market was taken following a motion by the Chairman of the House Committee on capital markets and institutions, Herman Hembe who lamented that the anticipated economic growth in the country would remain a mirage if the capital market remains in its comatose stage.<\/p>\n
Hembe, who brought the motion under matter of urgent national importance, noted that although the capital market in every nation is the backbone of the economy, the capital market in Nigeria has continued to witness downward slide in the last four years.<\/p>\n
He warned that for the projected economic growth envisioned by President Goodluck Jonathan during his budget presentation to be realized, “it is imperative that we work assiduously to get the capital market back to its desirable heights.”<\/p>\n
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