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Group seeks government’s intervention in capital market

The Association of Professional Bodies of Nigeria (APBN) has joined those calling on the federal government’s intervention to help revers e the dwindling fortunes of the Nigerian Stock Exchange (NSE) through favourable p olicy and pronouncements that can rekindle investors confidence in the market.

“There was no reason why the Nigerian government should not take a cue from the American government which has continued to spearhead the revival of the American economy through various intervention pr ogrammes and positive comments to reinforce investors confidence,” APBN President Mohammed Jimoh Faworaja said during a visit to the m anagement of the NSE on Wednesday.

APBN is the umbrella body of 24 professional bodies that are recognized by the a ct of parliament in the country.

It was established in 1983 to provide a rallying point for top professionals to contribute to building a virile nation.

Prior to the present lull in the market last year, the NSE had recorded a steady growth in all major market indicators, with its market capitalization, All Share Index and prices of shares experiencing stable appreci ation and making it one of the best in returns on investments in Africa.

About 1 trillion naira was said to have been given out as loans by banks to thos e willing to buy shares, but many are unable to pay back as share prices have crashed.

The market, which had witnessed a seven-day sustained appreciation, fell by eigh t billion naira on Wednesday, with most highly-capitalized stocks witnessing share appreciation.

The All Share Index, which opened at 20,018.55 points, dropped by 0.19% to close at 19.980.79 points, while the market capitalization shed 0.18% to close at 4.52 trillion naira. Other market indicators show that investors stake d 1.44 billion naira on 237.4 million shares in 6,417 deals.

As a response to the meltdown, the government has set up two committees to exami ne the effects and impacts of the current economic meltdown on the economy and the capital market in particular. The committees are also charged with the a dvising the government on what steps to take.

The government on several occasions has ruled out any intervention, saying the m arket should be allowed to correct itself.

But some stock brokers, bankers and financial experts have repeatedly called on the government to reconsider its stand and borrow a leaf from other countries.

Faworaja believed that with government’s direct intervention through injection o f funds, favourable policy and pronouncements, the market will pick up again.

The group described the market as a great platform for liquidity provision and t herefore called on all the stakeholders to work in harmony in supporting its rej u venation.

APBN also observed that there were too many different codes of corporate governa nce in the country, and that it would be in the best interest of the market to h a rmonize them into one.

In their remarks, the NSE officials said in spite of the market meltdown, there exists greater opportunity now to invest in the market by those willing to take a dvantage of the current low share prices.

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