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Capital market operators seek downward review of interest rates

by Business News Report

Some capital market operators on Tuesday called for downward review of the money market interest rate to boost investment at the nation’s capital market. They said in Lagos that high yield of money market instruments were discouraging investors from investing in the capital market. Mr Bayo Adeleke, National Secretary, Independent Shareholders Association of Nigeria (ISAN), said that investors were patronising long-term investment windows due to high yields offered by treasury bills (TBs) and bonds.
Adeleke said that the interest offered by money market instruments were discouraging investors from staking their money in the capital market. He said that banks invest more on TBs and bonds due to high interest rather than lending to the real sector or investing in the capital market. Adeleke said that developments in the economy had called for a shift in the nation’s macroeconomic management for development.
Mr Emeka Madubuike, Managing Director, Compass Securities Ltd., said the market would continue to experience fluctuations unless the incumbent government releases its economic blue print. Madubuike said the Central Bank of Nigeria (CBN) should adopt macroeconomic measures that would boost economic activities. He, however, called on investors to take advantage of the current low price of equities and increase their stake in the market.
“Prices are low and very good for new investors to come in and increase their stake in the market,’’ Madubuike said.
Meanwhile, the All-Share Index appreciated on Monday by 1261.44 points or 4.18 per cent to close at 31,441.71 compared with 30,180.27 posted in the corresponding period.

Also, the market capitalisation which opened at N10.345 trillion rose by N432 billion or 4.18 per cent to close at N10.777 trillion due to price gains.
Evans Medical led the gainers’ table in percentage terms, increasing by 38.39 per cent or 21k to close at 75k per share.
Transcorp increased by 29.13 per cent or 60k to close at N2.66, while PZ Industries advanced by 25.26 per cent or N6.96 to close at N34.51 per share. On the other hand, Northern Nigerian Flour Mills topped the losers’ chart, dropping by 14.14 per cent or N2.19 to close at N13.30 per share. Academy Press declined by 13.19 per cent or 12k to close at 79k, Paints and Coatings Manufactures went down by 13.04 per share or 15k to close at N1 per share.
Overall, 2.38 billion shares worth N18.99 billion traded in 19,769 deals last week against 1.37 billion shares valued N17.95 billion exchanged in 17,391 deals in the preceding week. The Financial Services Industry led the activity chart with 1.99 billion shares worth N13.19 billion traded in 11,232 deals. The Conglomerates Industry followed with a turnover of 106.53 million shares worth N425.53 million transacted in 1,150 deals. The third place was occupied by Natural Resources Industry with 100.02 million shares valued N50.10 million achieved in 16 deals.

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