Nigerian Capital Market Has Positive Growth Potential For 2025 – Uwaleke
By Sunday Etuka, Abuja
Renowned Capital Market Professor, Uche Uwaleke, has predicted a bullish growth for the nation’s capital market in 2025.
Prof. Uwaleke made the prediction on Monday while speaking on ‘Good Morning Nigeria’, a daily programme on the Nigerian Television Authority (NTA).
He said, “I am very optimistic that 2025 will be a lot better. Not only in terms of the capital market but even in terms of the economy as a whole. The performance of the market is a function of the economy. The economy also determines to an extent how the market performs.’’
Justifying his prediction, Uwaleke said, he expects the Central Bank of Nigeria (CBN) to halt Monetary Policy Rates in 2015, beginning from January, and that by the second or third quarters, the monetary policy will ease.
He contended that once the rates are reduced, the Monetary Policy Rates would begin to come down, which according to him, is positive for the equity market because investors would want to do more of equities.
In his words: “If you look at what has been put in place so far, on the part of the Central Bank of Nigeria (CBN), for example, we expect that in 2025, CBN will not only pause Monetary Policy rates hike, we expect that there will be a pause from this January and by second or third quarters we expect to see easing of monetary policy. Once we begin to reduce rates, monetary policy rates will begin to come down. That is also positive for the equity market because investors will like to do more of equities.
“And there is also an issue of banking consolidation that is ongoing, and banks are returning to the market. Access Bank has been able to do that, other banks are following suit. That is also a potential for 2025.
“Recently, the CBN introduced the Electronic Foreign Exchange Matching System (EFEMS), for Foreign Exchange (FX) transactions in the Nigerian Foreign Exchange Market (NFEM) which will also go a long way to stabilising the exchange rate, because stability in exchange rate is important for both foreign and local investors.
“I want to mention that CBN also recently introduced the Non-Residents Nigerian Ordinary Account (NRNOA) and Non-Resident Nigerian Investment Account (NRNIA) which they are trying to use to attract Nigerians in the Diaspora to invest in the domestic market. Those are the potential that the market has in 2025.
“Also with CBN, there is this currency swap arrangement with China. It will also help to strengthen the Naira. So these variables will work in favour of the market in 2025”, he said.
On the fiscal side, he said, “there are tax reforms. One of the things the tax reforms would do for example on the part of individuals is to increase disposable income. As being canvassed in the reforms, those earning N800,000 and below will no longer pay tax… which will boost the capital market.
“Recently, the Federal Ministry of Finance launched a N250billion real estate fund, this is also something that is positive for the market.
“What I expect the government to do in 2025, is to further see how they can incentivise listing on the market. They should encourage many companies to list on the Nigerian Stock Exchange. The government can introduce a tax holiday for companies to come and list. A company like the Nigerian National Petroleum Company Limited (NNPC Ltd.) is not yet there”, he said.
Also speaking, the Director General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama said, efforts are being intensified to address the challenges in the market.
He said the Commission is working assiduously to ensure prompt payment of unclaimed dividends, using available technology.
“We are working to deal with challenges like that. We want to make sure that people who have dividends unclaimed get their money as and when due without any problem.
“We are also investing heavily in technology to make sure that this process is handled by investors using their cell phones. This is our desire, this is the way we want to go,” he said.
The SEC boss said efforts are also ongoing to rid the market of Ponzi Schemes.to ensure confidence.
