Worried by the effect of Monetary Policy Committee (MPC) decisions on the nation’s capital market activities, operators have stressed the need for Central Bank of Nigeria (CBN) to appoint a capital market representative as one of its MPC members.The operators argued that a lot of policies and decisions that come from the committee are inimical to the good performance of the capital market.
They insisted that appointing a capital market representative, as a member of the board will make policies to be in tandem with the goals and aspirations of aspirations of the capital market.
Specifically, the Managing director of Highcap Securities Limited, Imafidon Adonri explained that a representative of capital market will voice the opinion of the capital market and make sure that policies are not inimical to the activities of the capital market but ensure that it will positively support the capital market.
“In the past, certain policies have favored the money market and certain policies have tended to drive up interest rate in the economy which is unfriendly to the development and growth of the equities market and the real sector because the members of the MPC only look at the money market aspect where as the capital market person will look at the impact on the capital market, the real sector and advice accordingly.
“A lot of operators in the central bank only feel that their responsibility is for the money market and banking system but when we were going through a training in finance, we were told that that the CBN is at the apex of the financial system which means that the CBN has responsibility for every aspect of the financial system because both their actions and pronouncement affects every area of the financial system and the economy at large.
“So whenever they come up with policies or statements they should look at the sensitivity of the capital market to those statements a lot of policies and statements that come from them are inimical to the good performance of the capital market, which is unfortunate.”
The Managing Director of Pivot Capital Limited, Dare Adejumo explained that a representative from the capital market should be in that committee because the market is the barometer of the entire economy.“Yes, it is not a bad idea. Our market is the barometer for gauging the economy so we need to be represented.”
Also speaking, the Chief Relationship Officer/Dealer with Foresight Securities & Investment Limited, Fakrogba Charles admitted that pronouncement by the MPC has directly affected the goo performance of the market.“The capital market does not operate in isolation, over time we have seen that pronouncement by the MPC has a direct effect on the market, so brokers who clamoring that there should be a capital market representative in the MPC is not uncalled for, it is something that is good.
“However, in that committee, we have men and women who are vast in financial institutions whether money market or capital market, so I do not think that they do not know anything concerning the capital market. They are well educated and exposed and with their wealth of experience they can give good advice to that committee.
“But that is not to say that we do not need a capital market operator in that committee, if it will expand the scope of that committee and give them different ideas and background which will enhance the deliberations that will come out of that committee.He, added:” if the number of people they have there is enough and they are saying they can not take additional person, I still believe that the caliber of persons on that committee are vast enough to represent the interest of the Nigerian capital market, money market and larger economy.”
By Helen Oji
The Guardian Newspaper March 30th, 2018