Passage of PIB ’ll boost capital market activities –Onyema

January 25, 2012 by Udeme Ekwere

Chief Executive Officer, NSE, Mr. Oscar Onyema
| credits: File copy

Quick passage of the revised Petroleum Information Bill is expected to attract more investments, thus boosting activities in the Nigerian capital market.

The Chief Executive Officer of the Nigerian Stock Exchange, Mr. Oscar Onyema, said this in a statement made available to our correspondent on Tuesday.

He noted that a speedy passage of the bill would ensure that the Nigerian economy became more open to the outside world, thus improving activities in the economy and the Nigerian capital market.

Onyema also explained that the NSE supported the ongoing plans by the Federal Government to deregulate the downstream oil sector, adding that it would open up the capital market.

He said, “We at the Exchange believe that the passage of the revised PIB would go a long way toward improving activities in the capital market, because a lot of opportunities would be opened up and more investments would find their way into our capital market.

“The deregulation of the downstream oil sector would also help to create more companies, which would encourage the listing of companies especially some of them in the oil and gas sector, which we have been trying to attract into the market for some time now.”

He added that listing of such firms would contribute towards increased growth in the market as it would raise the depth of the market, thus attracting more foreign investments into the equities market.

The Managing Director, Lambeth Trust and Investment Limited, Mr. David Adonri, had told our correspondent that the deregulation process would work in favour of the equities market, which had especially suffered huge losses last year.

According to him, with the opening up of the energy industry (which is expected to come as a result of the deregulation process), the market will benefit in terms of investment inflows, especially from foreign investors, who are usually in support of full privatisation.

He said, “With the deregulation process, it is expected that, in due course, government will fully privatise its enterprises, thus opening the entire energy industry to competition. The arising enabling environment will lead to investment inflow that will generate more productive employment

“Excessive borrowing by the Government at any cost is the main factor responsible for crowding out funds from the equities market and the real sector of the economy. This has caused the equities market to under-perform, thus denying the productive sector the type of critical capital required to generate productive employment and create wealth for the economy.”

He added that consequently, this policy was expected to reduce propensity for government to borrow, thus facilitating decline in interest rates. He said this would lead to the competitiveness of equities as a viable investment outlet.