Capital market to recover in 2013- says Sanusi

Bullish Market

The Governor of Central Bank of Nigeria, Mallam Sanusi Lamido has said that the Nigerian capital market will bounce back next year.

He said this in Lagos yesterday during a courtesy visit to his Lagos office by members of the Charted Institute of Stockbrokers.

According to him, the nation’s economy will not recover fully until the capital market is given its place as a long-term security provider.

“Without a very strong and deep capital market the economy will continue to depend on banks for investment funds”, he said.

He noted that banks do not have what it takes to provide the kind of longterm loans required to grow the economy, adding that capital market becomes handy in the provision of the needed funds for growing the economy.

Sanusi said, “Every downturn of the capital market takes an average of three years to recover. I have always said that the market will recover in 2013, but the question according to him is, have we learnt our lessons? “We need to look at the concentration of the market. A situation where the banking sector remains the dominant player in terms of capitalisation is not ideal.

The Governor advised members of the CIS to use the occasion of their forthcoming National Workshop as an avenue to discuss issues that will stabilise national growth and to facilitate the further deepening of the Nigerian capital market.

On the forbearance for capital market operators who obtained margin loans from banks and are currently not able to pay back, the CBN Governor said, “Our position at the CBN is that everybody who have lost money through margin loans and trading have to bear their losses”.

“We are of the opinion that capital market operators, the banks and Asset Management Corporation of Nigeria should all take a portion of the losses so that the market can move forward.”

The President of the CIS, Mr. Ariyo Olushekun, appreciated the CBN Governor for his effort to stabilise and grow the Nigerian economy.

“Let me start by acknowledging your untiring efforts as CBN Governor to ensure economic stability and growth in Nigeria. The transformation of the Nigerian banking industry and the establishment of a monetary regime that has engendered relative stability in the macro economy are eloquent testimonies”, he said.

Source: Mirror