Capital market can effectively fund 2016 budget deficit – NSE
The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr Oscar Onyema has restated that the nation’s capital market has the capacity to effectively finance the implementation of its Medium Term Expenditure Framework (MTEF). Onyema who disclosed this while reviewing the performance of capital market in 2015 and the outlook in 2016 also said the Exchange would be opportune to finance the federal government ’s proposed budget deficit for 2016
He said that with greater clarity on policy direction, the NSE anticipate the return of investors who had remained on the sidelines throughout 2015. This return according to him predicated upon return of investor confidence as a result of effective implementation and communication of the government’s economic blueprint; credibility in monetary policy stance; relative stability in the macro economy (Oil price stability above benchmark targets, increase in tax collection to GDP ratio, etc) and Improved security.
The NSE boss stated that uncertainty and volatility dominated forecast for the New Year and beyond as Nigeria struggles with commodity price shocks and the resultant impact on the Naira. According to him, this is in the context of adjusting to new government policies targeting import substitution, inclusive growth (lower income focus) security, and eradicating corruption. Onyema stated that the downturn from 2015 has already continued into the new year, stressing that 2016 anticipate to be a challenging year for the capital market and the domestic economy.
Speaking further he said “we intend to continue our colloborative efforts with tthe new administration and other private sector player to create a framework for financing the nation’s infrastructure and capital requirements. Additionally, he said ” we plan to work with the FGN to ensure that the appropriate messaging is conveyed to the investor community.
He however said that the current state of the market creates both challenges and opportunities for investors believe that taking a portfolio approach to investing provides the best risk adjusted alternative for participating in the capital market. As such he said the NSE want to ensure that it provides a raportaiore of products that will allow investors to create well diversified portfolios of uncorrelated assets classes.