Business
Experts Blame Non-Passage Of Budget For Liquidity Crisis
Some financial market operators on Monday called on the National Assembly to fast track the passage of the 2017 Budget to boost liquidity in the economy and ensure its effective implementation.
They told newsmen in Lagos, Monday, that budget approval was necessary to stimulate the economy through government spending.
Head Research, SCM Capital Ltd., Mr Sewa Wusu, called for the quick passage of the budget to stimulate economic activities, noting that non-passage of the budget was affecting various sectors of the economy.
Wusu said that the late passage would affect the budget implementation, especially the capital budget.
He said that the budget approval should be hastened for government to hit the ground with implementation as the highest spender in the country.
Wusu, however, attributed the zigzag performance at the stock market to low confidence of both local and foreign investors.
He said that investors were still weary of market outlook due to macro economic development.
Wusu attributed foreign investors’ lack of confidence in the market to foreign exchange issues, noting that they were yet to be convinced of the Forex supply side in spite of the apex bank’s regular intervention.
He said that investment in the market, with the turn of events, was for investors with high risk appetite.
A Professor of Economics, Sheriffadeen Tella of the Olabisi Onabanjo University, Ago-Iwoye, said that budget approval delay would affect the multiplier effects on sectoral expansion and employment generation.
Tella said that the stock market had failed to respond to some impressive results declared so far.
According to him, this is because people have low income which is largely devoted to meeting basic needs than investment in the face of rising prices.
He added that Nigerians were generally risk averse and were yet to overcome the negative effects of loss of fund in the protracted economic crisis of the recent past.
Reports say that a turnover of 1.31 billion shares worth N10.32 billion were exchanged by investors in 13,042 deals last week against 1.03 billion shares valued at N7.98 billion exchanged hands in 13,441 deals in the preceding week.
The Financial Services industry, when measured in volume terms, led the activity chart with 1.14 billion shares worth N6.03 billion traded in 7,518 deals.
It contributed 87.01 per cent and 58.39 per cent to the total equity turnover volume and value.
The Consumer Goods sector followed with 71.21 million shares, valued at N2.31 billion transacted in 2,261 deals.
The third place was occupied by Services Industry, with a turnover of 29.39 million shares worth N24.59 million in 258 deals.
The NSE All-Share Index and market captialisation depreciated by 0.77 per cent and 0.80 per cent to close the week at 25,454.93 and N8.807 trillion respectively against 25,653.16 and N8.878 trillion achieved in the previous week.
Lafarge Africa led the gainers’ table for the week in percentage terms, improving by 13.92 per cent or N5.01 to close at N41.01 per share.
Fidson Healthcare followed with a gain of 13.48 per cent or 12k to close at N1.01, while Livestock Feeds increased by 10.94 per cent or 7k to close at 71 per share.
On the other hand, Guinness led the losers’ chart in percentage terms, dropping by 9.77 per cent or N6.50 to close at N60 per share.
Seplat trailed with a loss of 9.73 per cent or N38.72 to close at N359.28, while Diamond Bank shed 8.51 per cent or 8k to close at 86 per share.
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