The Managing Director/Chief Executive of Arthur Steven Asset Management Limited, Mr. Olatunde Amolegbe, has called on the Federal Government to actively promote listings on the nation’s stock exchange as a strategy to bolster capital market participation and enhance tax revenue generation.
Amolegbe emphasized the importance of encouraging both companies with direct or indirect government holdings and those involved in government transactions to go public. This move, he believes, would not only deepen the capital market but also foster transparency and contribute significantly to increased tax revenue in the country.
Speaking at the Capital Market Correspondents Association of Nigeria (CAMCAN) January forum in Lagos, themed “Review of 2023 Market Performance and Outlook for 2024,” Amolegbe highlighted that Nigeria’s market capitalization to GDP currently stands at 13%, a significant deviation from the over 50% observed in many other countries. He noted that the majority of major companies in the country are not actively participating in the Nigerian capital market.
As a former President of the Chartered Institute of Stockbrokers, Amolegbe stressed that increased listing would not only ensure transparency for listed companies but also contribute to enhanced tax revenue for the government.
Expressing optimism about the potential listing of Dangote Refinery and NNPC Limited, he anticipated a positive impact on the capitalization of the Nigerian capital market. However, he also addressed the pressing issue of insecurity in the country, emphasizing its role in fueling inflation and causing investor apprehension.
“Insecurity is a major issue, and the government needs to address it as it disrupts the supply chain, contributing to the increase in the inflation rate,” Amolegbe stated. He highlighted that an unstable environment would deter both local and foreign investors, leading to a decline in foreign exchange inflow.
Speaking on the outlook for 2024, Amolegbe emphasized that foreign exchange conditions would significantly influence the capital market’s performance. He stressed the need for improved liquidity and stable prices, cautioning that without these conditions, the year might pose challenges for many quoted companies.
Reflecting on the 2023 market performance, he noted that the All-Share Index closed the year at 74,773.77 points, and the market capitalization concluded at N40.918 trillion. Key events influencing the market in 2023 included a smooth government transition, the president’s inaugural speech, the partial removal of subsidy, the unification of foreign exchange, and an increase in the monetary policy rate. Investors and stakeholders are keenly observing how these factors will shape the trajectory of the Nigerian capital market in the coming months.
