NSE Crisis May Derail Integrated Regional Exchange




The crisis at the Nigerian Stock Exchange (NSE) could cause a set back to the integrated West African stock exchange, an official of the Ghana Stock Exchange (GSE), has said


Deputy Managing Director of GSE, Mr. Ekwo Afedzie, made the remarks at the Independent Shareholders Association of Nigeria (ISAN) Executive Retreat in Accra, Ghana.


Afedzie said that the crisis was capable of affecting the regional exchange which ought to have been accomplished by 2012.


“We in the integration committee are worried about the trend of events at the Nigerian capital market. As stakeholders, our anxiety is that the issue of West African capital market will now be secondary to officials of the NSE,” Afedzie said.


He said that unless Nigeria resolved quickly the NSE crisis, the collective prospect of using the integrated exchange to leverage the region’s economy would remain a mirage.

“Without being economical with words, officials of the NSE have provided capital market knowledge to the whole concept of a regional bourse,” he said.


Afedzie, who spoke on “Ghana Stock Exchange and the challenges of post global economic meltdown,” said that Ghana’s stable macroeconomic policies remained the major instrument in managing the global financial swing.


He identified the macroeconomic policies as visible political culture, sound economic policies, strong currency and local and foreign investors’ confidence in Ghana’s leadership.


 “To us, the manifestation of these is the voluntary acceptance and notification of the crude oil prospecting companies to be listed at the GSE,” Afedzie said.


The deputy managing director also identified the limited number of tradable shares and its attendant poor market liquidity as the exchange’s major problem.


Afedzie said that the exchange, which currently operates remote trading, settlement and clearing, including custodianship, would soon witness trading in both derivatives and futures market.


He said that the automated character of the Ghana capital market and the yawning of investors had made it inevitable for the introduction of derivates instruments.  


“The future of automated GSE depends on a day trading, borrowing and lending of stocks, margin trading as well as having independent market makers who buy and sell for themselves,” he added.


According to Afedzie, GSE’s only way of maintaining a clean bill of health on market based infractions remains the effective and proactive use of automated surveillance in the market.


Earlier, the National Coordinator of ISAN, Mr. Sunny Nwosu said that the choice of Ghana for the retreat was to expose participants to new trends in global capital market.


Nwosu said that the retreat had challenged ISAN members to re-evaluate their contributions to national and regional economies.

 “The retreat has afforded us the opportunity to re-acquaint ourselves with the national investment laws and do a critical study of government privatisation and operations of quoted companies,” ISAN chief said.


According to Nwosu, as a group moderated by law, we have resolved that it is not going to be business as usual and that ISAN must continue to defend the interest of minority shareholders.


The News Agency of Nigeria (NAN) reports that the three-day retreat, which ended on Sunday, September 5, 2010 was attended by stakeholders from Ecobank Group, GSE and ISAN.


Source: Thisday



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