This fund, according to the institute, is important if there is going to be a rebound from the huge losses recorded in the capital market in the past few years.

The President, Chartered Institute of Stockbrokers, Mr. Michael Itegboje, made the appeal to members of the House of Representatives in Lagos on Thursday.

According to him, even though the call for a stabilisation fund is not new in the market, it remains necessary if the capital market is to get the liquidity it requires to boost activities.

He added that following the global meltdown, some countries had made use of such funds to cushion the effect of the fall on their markets.

He said, “We, as stockbrokers, are again renewing our call for a stabilisation fund for our market. This fund is very necessary as it will help to mitigate the losses incurred by investors and stockbrokers in the capital market in the last few years.

“And so, we want the Federal Government to look into this issue, as many countries have taken the route (of the fund) for their markets’ recovery, and Nigeria should not be an exception.”

Itegboje suggested that the Asset Management Corporation of Nigeria could take up the challenge of ensuring that such a fund was properly used in the market.

He said, “A lot of our members have yet to recover from the losses they incurred during the meltdown that affected our market in 2008. As I speak with you now, many brokers are out of business and a few of them died as a result of heart failure. Our market is at its lowest ebb today and remains the lowest among all the frontier markets.

“AMCON can do the job of ensuring that the stabilisation fund works effectively, and the Nigerian market would be the better for it. I think this fund can go a long way in helping to create a rebound in market activities.”

The CIS boss said that the major issues rocking the capital market included a lack of investor confidence and the problem of illiquidity. He added that investors that stockbrokers had advised in the past to buy shares, and lost their investments, would no longer have confidence in returning to the market.

Itegboje suggested that a law making it mandatory for all foreign companies doing business in Nigeria to be listed on the NSE be promulgated.

According to him, the presence of more foreign firms on the Exchange can help in restoring investor confidence in the market. He said if this was done, more investors, especially foreign ones, would be attracted to the Nigerian market.

Source: Punch/Udeme Ekwere