Ikhazobo links stock market downturn to liquidity squeeze


-Council prunes applicants to 119

Thursday, 30 September 2010  By Helen Oji


THE Interim Administrator of the Nigerian Stock Exchange (NSE), Mr. Emmanuel Ikhazobo, has attributed the consistent lull in the stock market to liquidity squeeze in the system.


Ikhazobo, in an interview with The Guardian, explained that the volume of shares in the stock market currently is more than the liquidity to buy the shares, adding that banks are dumping their shares to meet up with the Central Bank of Nigeria’s directive that banks’ risk portfolio asset in the stock market must not exceed 10 per cent.


He expressed optimism that the market would rebound as soon as the banks “come back on their feet.”


“They have more shares in the market than even the liquidity to acquire the shares. We are in politics and all those who have shares are dumping them. They want cash so they off their shares.
“The policy that banks exposure in the stock market must not exceed 10 per cent is another factor. They are dumping shares to bring it down to 10 per cent but as soon as banks are back on their feet, their will be fund and people will start buying” he assured.
Meanwhile, indications emerged on Tuesday that the Council of Nigerian Stock Exchange (NSE), may have pruned down the number of applicants for the vacant office of Director-General and other positions to about 119, from 994.


Names of applicants who scaled through the elimination process would be forwarded to the Securities and Exchange Commission (SEC) after which it would be sent to Accenture, the firm handling the executive recruitment.


The decision to prune down the number was to ensure that certain applicants who might have some controversies surrounding them were eliminated from source before the names are forwarded to Accenture for possible shortlisting.


The selection process is coming on the heels of NSE executive management recruitment vacancy advertorial, published recently on a national daily in which the offices of Chief Executive Officer (CEO), Executive Director, Market Operations and IT; Executive Director, Listings; and Executive Director, Strategy and Business Development were advertised.


The advertorial, which stated that only candidates that meet the eligibility criteria would be contacted, throws submission of applications open till the close of business on October 12.


The Guardian learnt that among the applications eliminated by NSE on Tuesday were those that failed to meet eligibility criteria.


The shortlisted candidates are likely to face an independent panel, which will prune them down to three to be vetted by the SEC and the Stock Exchange’s council.


At the meeting on Tuesday, council was said to have expressed concern over the state of the market, but regretted that it was handicapped in terms of decisive measures to apply to stem the tide of losses.




Source: Guardian



Comments are closed.