Stockbrokers under the aegis of the Association of Securities Dealing Houses of Nigeria (ASHON) and Chartered Institute of Stockbrokers (CIS) have identified some achievements, challenges and the way forward for the Nigerian capital market at 61. The NGX, formerly Nigerian Stock Exchange, was incorporated in 1960 but commenced business in 1961. In separate statements, the two bodies explained that the market had contributed significantly to the growth and development of the economy but that a lot should be put in place to operate optimally under the current tough environment.
The President, Chartered Institute of Stockbrokers, Mr Olatunde Amolegbe, in a state-ment, explained that the market, relative to the economy was abysmally low. “It’s not heartwarming to say that the Nigerian capital market, relative to the size of the country’s economy, is still abysmally low, as the equity market capitalisation to GDP ratio stands far below 20 per cent, in contrast to the South Africa’s 348.3 per cent and Brazil’s 68.4 per cent.
“The ratios in the key developed economies are in excess of 100 per cent. The participation of Nigerians in the capital market is very low. Less than five per cent of the country’s population are involved in the market as investors, while less than one per cent of registered companies are listed. “Despite the tough operating environment, the Nigerian stock market was adjudged the best in Africa and No.3 in the world in terms of return to investors in 2017.
Three years later, in 2020, the market was adjudged the best in the entire world,” said Amolegbe. The institute advocated a review of the enabling legal frameworks to encourage the local pension funds to significantly increase their investment in the Nigerian equity market.