Capital Market: ASHON Boss Calls for More Government, Operators Partnership

The Chairman, Association of Stockbroking Houses of Nigeria (ASHON), Chief Patrick Ezeagu has called for more partnership between the government and the capital market operators in order to ensure a more vibrant market.

Speaking to journalists in Lagos on the state of the market, Ezeagu noted that the growth and development of the capital market has a relationship with the state and development of the economy.

On the challenges facing the market, he said the number one challenge is liquidity, stating that “Once we don’t have liquidity in the market, every other thing takes cue from it.”

According to him, another issue is the capacity of the various operators in the capital market. “This has to do with the capital market operators (CMO) which is us as well as the investors and the public. We need to be abreast of dynamics of changes in the market. The issue of the way and manner the pension fund administrators (PFA) run their funds currently requires some modification for enhanced efficiency and effectiveness as there are certain laws that states stipulate the percentage of the fund can be invested in the capital market and we are saying that this should be increased in order to deepen the market and strengthen liquidity.”

“Another challenge that needs to be addressed is the absence of a deliberate policy from the government that can boost the market. The capital market is information-driven, hence, government must demonstrate consistency of policy in order to sustain investors’ confidence in the market. Government is currently borrowing at a very high cost and that borrowing is impacting negatively on people’s investment in the equities market because returns on Treasury Bill is now more attractive than equities,” Ezeagu said.

According to him, an investor can lock in like up to 16 per cent in treasury bills.

“If the economy is growing consistently, you can do more than 16 in equity but it is difficult under the current operating environment. Therefore, government’s treasury bill is making investment in equity less attractive with dire consequences on the activities of capital market operators,” he said.

However, the stockbroker said there are some glimmer of hope as the government is trying to intervene, especially, in the area of foreign exchange to ensure that the gap between the official and unofficial rate narrow down considerably.

“We still believe that the exchange rate for the dollar is too high at this point in time, ” Ezeagu said.


This Day Newspaper November 22nd, 2017.


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