Business
Nigeria: Capital market recovers witnesses gains of 34% in 2012
Ms. Arunma Oteh was appointed CEO of the SEC in December 2009/January 2010 built a team that vastly improved its oversight functions of the capital market such as improved corporate governance, encouraged transparency and closed various loopholes used for insider-trading. Several stock brokers were punished for various infractions and the Nigerian Central Bank outlawed the participation of commercial banks directly in the stock market.
The recovery of the global economy in 2011 and 2012 also played some role. In particular, the quicker recovery in the economies of emerging countries compared to those of the major western countries propelled foreign investors and fund managers to return to invest in emerging markets, where yields are much higher. In addition, the relatively low interest rates on savings in the money markets both in developed western countries and even Nigeria, encouraged the decision of many investors to go back to the capital market where returns on investments are much higher.
At present, efforts are being intensified by the various regulators to woo Nigerian investors back into the market. Foreign investors account for 78 percent of the total capital investment in different sectors of the economy – this could be a future source of volatility for the market if the foreign investors suddenly decide to pull out.
Source: Nigerian Tribune
