WE are happy that domestic retail investors are returning. This is because of what we see in the economy now. The government has shown that it has become more committed in improving the economy through the ease of doing business policy that they just put in place.
Also, we have seen the recent improvement in liquidity via-a-viz the continuous reduction in inflationary pressure and monetary policy improvement. So, we are very glad when all these things are happening. Equally, we saw an improvement in earnings of most companies from their first and second quarter results.
We are very glad that there is hope and we are looking forward to good dividend plan this year and that is why you see that retail investors are coming back and we are taking position. Now that the retail investors are coming back, we expect the government to make sure that their policies are consistent.
Anything like policy somersault will not be good for the market. Secondly, the government should eliminate things that destroy confidence such as the issue of stamp duty collection, which we have been talking about. Once they start removing all these things, then, of course, we the domestic retail investors will have more money to continue to buy and sell shares. So, government needs to continuously on its part continue to formulate policies that are positive in nature and that have capacity of improving the capital market.
These are what we are looking forward to from the government. Stabilisation policies should continue to be pursued —Chief Sola Abodurin THE retail investors are responding to the development in the economy. The economy is getting stabilised, inflation rate has gone down and prices of food materials are going down as well. Again, production of goods and services are increasing in response to government policies.
So, there is more money with people and when there is more money with people, the natural thing is for them to look for where to invest them. When government policies are good and people are responding and the economy is getting stabilised as a result, there will be more money with retail investors and that is why we are seeing this kind of activity in the capital market. The government should keep on pursuing the stabilisation policies so as to get the economy back on track.
You know that recession is gradually reducing as a result of the policies of government. So, if the government continues with these positive policies, the economy will be in a forward march again and a lot of money will be available to the investors to invest. To make sure that interest of local investors is sustained, I think the Securities and Exchange Commission should engage in activities that will restore investors’ confidence and some of them they are doing already.
Look at the issue of e-dividend mandate, so many people whose dividends have been held up for many years are now being paid. When you restore confidence in the system, investors will believe in you and they will begin to come back again. Weed out fraudulent operators — Comrade Lawrence Oguntoye FIRST and Foremost, local retail investors are those that patronize capital market and invest for long term. Exchange rate, high interest rate and inflation are some of the things that affect the capital market negatively, but the drive to diversify the economy, the e-dividend platform recently launched by SEC and the 2017 budget, have energized and encouraged investors to return and increase their investment in the capital market.
Some manufacturing companies in Nigeria like Dangote Cement among others have proved to domestic retail investors that their investment is secured and the efforts by the government to revive the economy will enhance their profitability. For me, the federal government, SEC and the Nigerian Stock Exchange, NSE, should come up with measures that will attract diversified investors. FG should provide healthy and conducive environment, security and necessary infrastructure for businesses to thrive.
I also think that SEC and NSE should engage more in sensitisation programmes, while fraudsters among the stockbrokers/ dealing member firms should be named and shamed. If all these are done on continuous basis, it will help to boost and sustain investors’ confidence in the market.
They should encourage accountancy and financial discipline in the quoted companies. SEC should be allowed more independence —Farouk Umar RETAIL investors are coming back because there is now liberal policy on foreign exchange. Foreign investors withdrew their money because they could not transfer the proceeds of their investment, but now the new forex policy has enabled them to once more invest in the market and transfer their proceeds. So, our coming back to the market as retail investors is because the foreign investors are back. Another thing is that the government is beginning to get it right in terms of policy formulation and it is attracting retail investor back to the market.
Again, we see that the government is now coming up with policies that are making businesses more lucrative and profitable. Power, for instance, has improved and manufacturing companies are relying less on diesel for their production. You can see that some of these policies, especially forex policy, has started making the banks and other companies more profitable. The second quarter results we have seen have shown us that it is worth investing in these companies.
Most of the companies are returning to profitability from loss position last year. Now, that things are taking shape and retail investors are coming back, I think the government should continue with the policy of not interfering with the regulators. The government should allow the CBN and SEC more independence to run their capital market.