Brokers want govt to resolve liquidity crisis

The issue of illiquidity has again come to the forefront on the Nigerian Stock Exchange, with brokers and some key stakeholders calling on relevant authorities to resolve the crisis.The brokers, who spoke under the aegis of the Association of Stock Broking Houses of Nigeria, on Wednesday, said it was important for the Federal Government to look into the liquidity crisis rocking the equities market.This, according to the brokers, will help to save the market from an imminent collapse. Specifically, the President of ASHON, Mr. Rasheed Yusuff, said that there was the need for the Federal Government to, as a matter of urgency, revisit the issue of bail-out funds to stockbrokers and stockbroking firms that were involved in the margin loan issues.Speaking at the associations 2nd Annual General Meeting in Lagos, Yusuff said the government needed to support the brokers on the issue of debt forbearance, which according to him, will help in resuscitating the market.He disclosed that ASHON had succeeded in securing the approval of the Board of Directors of both Asset Management Company of Nigeria and the Central Bank of Nigeria to buy into the concept of debt forbearance for capital market-related debts.He said, "Recently, the Minister of Finance, Dr. Ngozi Okonji-Iweala, indicated her readiness to also consider favourably our proposals in this regard. It is our expectation that once this particular problem is resolved, appreciable activities may return to the market."With banks not funding the market, local investments on the brink of being wiped out and foreign investors having their own problems, funding the market has become a critical issue, which the authorities should not overlook."He added that there was also the need for an appropriate funding source for the day-to-day capital market trading activities, stressing that the new guideline for margin loan facility would only be effective, if backed by appropriate funding.While stressing the need to deepen the Nigerian capital market, Yussuff said that ASHON, in collaboration stakeholders, had been discussing possible alternative financing arrangements with the regulators and government functionaries.He said, "ASHON has been working closely with the Securities and Exchange Commission, the Nigerian Stock Exchange and other stakeholders to develop a package of incentives that will attract public companies in critical sectors of the economy to be listed in the NSE. "The recent pronouncements by the Capital Market Committee of the National Assembly to partner with the Securities and Exchange Commission and NSE in its efforts to woo multinationals, such as telecommunications and oil and gas companies operating in the country, to list their shares is a vivid testimony to our collective efforts in this direction."He, however, urged stockbrokers to remain steadfast and be creative in order to survive the harsh economic situation in the country."Members must avoid the temptation of engaging in activities that are unethical and position themselves for various opportunities," he counselled.
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