THE Nigerian Stock Exchange, NSE, has said that it will dialogue with the Central Bank of Nigeria, CBN, in implementation of a fresh banks’ recapitalisation as capital base weakens. The Chief Executive Officer, CEO, NSE, Mr. Oscar Onyema, stated this at the Rand Merchant Bank, RMB, Nigeria Economic and Business Conference in Lagos last week
Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele He noted that though the Exchange did not have full picture of the recapitalisation plan, it pledged to engage the apex bank on the way forward, adding that the last banking sector recapitalisation in 2005 raised the sophistication and liquidity of the Nigerian capital market. Recapitalisation : Shareholders laud NAICOM’s cancellation
“We are still studying the pronouncement that was made last week; we are not quite sure what it means, but what I can say is that historically if you look at the last big recapitalization efforts for the banking sector, the capital market was greatly used for raising the financing and indeed it was very beneficial to the capital market to the extent that the market became more sophisticated and a lot more players came into the market from the investors perspective,” he said.
“Till today, the financial sector is still one of the most liquid sectors listed on the stock exchange. So, we know that potentially, it could be very beneficial to the capital market.
” Speaking in the same vein, Prof. Uche Uwaleke, Professor of Capital Market and Chairman, Chartered Institute of Bankers of Nigeria, Abuja branch, said that five year policy thrust is a good development with a lot of positive impact on the economy, adding that the recapitalisation of banks would strengthen financial system stability and put the banks in a stronger position to finance big projects needed for development as well as play in the global scene.
He commended the CBN on the plan to scale up the anchor borrower programme and target of massive funding support for 10 commodities that consume a lot of foreign exchange (forex) to import, saying that it would help to conserve forex, grow external reserves, reduce food prices and possibly create job opportunities.
Source: Vanguard Ngr