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Stock market will rebound in third quarter — Capital Bancorp

By on July 21, 2015

The Managing Director and Chief Executive Officer, Capital Bancorp, Mr. Aigboje Higo, says he expects the nation’s stock market to rebound in the third quarter of the year.

Higo, who expressed the optimism in an interview with our correspondent on the sidelines of a news conference last week, said the market had been reacting to issues such as oil price decline, currency, inflation and perhaps security concerns.

He said the market would rebound in the coming months “because there will be more certainty around policy. It will be clear as to what we are going to be doing with the currency.

“We will definitely have an economy agenda espoused by the Buhari administration. We would have key ministers in place, driving policies and processes. I think all of that should be positive for the market.”

Commenting on the ongoing recapitalisation of stock broking firms, Higo said the industry would be better after the exercise, allaying fears that investors might lose their money.

“We have seen it (recapitalisation) in the insurance and banking sectors, where the operators had to increase their capital. Some of them were not able to make it while some made it. In our own case, most will make it, while a few will not. Some will merge to make it.

“For us, this is a very good time to be doing this. We have addressed the issues of minimum capital requirement and minimum operating standards.”

The Capital Bancorp MD said out of over 170 million people in the country, only five to seven million investors were registered on the Central Securities Clearing System, stressing the need for more active participation of domestic investors

Higo, who noted that the decline in the stock market in recent times had some downside for stock broking firms, said, “To the extent that if the market is not doing well, we are not doing as much business as we would like. So that affects us. But we hope that as the market improves, things will get better.”

He said at the end of the recapitalisation exercise, there would be increased competition and transparency, which would benefit investors.

 

[Punch]