Military vs IPOB: Political tension takes toll on Capital Market

.Investors in cautious trading at NSE as ASI lost -0.14%

Army, S’East Govs lack power to proscribe IPOB- Saraki

Following the palpable tension created by the clashes between the Nigerian Army and the Indigenous People of Biafra (IPOB) particularly in Umuahia, Abia State and its fallouts which continued to reverberate across the country, businesses are now at the receiving end of the tension.

In particular, the capital market, a critical arm of the financial industry, has been negatively impacted by the growing tensions across the country.

For example, Equities’ trading resumed for the week on Monday, on negative note, following huge losses recorded last week.

Investors’ traded cautiously as political developments may not have signaled restoration of sanctity in the South East region.

As at mid-day on Monday, the Nigerian Stock Exchange’s (NSE’s) All-Share index had (ASI) had lost -0.14 per cent, a development cross section of analysts said would reverse by mid-week.

But the country’s charged political situation was attributed as the cause of heavy loss in the stock market performance indices last week which if not checked could further worsen trend this week.

Cross -section of stakeholders and stock brokers who spoke to The Daily Times said that the country has remained charged such that some investors started reconsidering their investments in the country as there were calls from across the globe for clarifications, just as some hurriedly dumped.

A stock broker, who spoke on condition of anonymity told The Daily Times that the military and the pro- Biafra’s agitators’ clash in the South East of Nigeria, which threatened to spread to other parts of the country was of great concern to investors and the market which reacted accordingly.

He said, “Investors became apprehensive and unsure of political direction of country, this led to panic in the market as some withdrew their bids, while many offered theirs for sale”.

The broker, who said that the Nigerian equities market has relatively done very well soon far this year, added that a soothing environment needed to be enhanced for sustenance of market growth and confidence, adding that investors are always cautious of developments that would negatively impact their investments.

The Daily Times recalls that The NSE’s All-Share Index and Market Capitalisation depreciated by 2.65 per cent, and 2.63 per cent to close the week at 35,005.57 and N12.068 trillion respectively. The losses were the highest in a week this year to date recorded by the equities market.

The week also witnessed losses in all market measuring sectoral indices.

But the broker lauded the Senate President, Dr. Olusola Saraki, for dousing tensions across the country, following his calls on the Federal Government to address the issue.

One of our correspondents gathered that the market was not only somewhat reawakened by the statement of the Senate President, “but also the government moves to resolve the crisis swiftly.”

Meanwhile, the NSE has revealed that it has empowered over 25,000 capital market stakeholders in its efforts at making better investment decisions through investor clinics, which the local bourse organises on a regular basis.

The latest of such clinics, which shed light on the importance of dematerialisation as a necessity in the trading of shares, was concluded on Wednesday, September 12, 2017 at the Stock Exchange House, in Lagos; and was targeted at sensitising the investing public and brokerage community of contemporary initiatives in the market, a statement from the NSE revealed.

Participants were also made to understand the advantages of direct cash settlement and e-dividend processing in the consolidation of returns on their equity investment, as well as the overall benefits to the Nigerian Capital Market.

The Executive Director, Market Operations and Technology, NSE, Mr. Ade Bajomo, was quoted as saying that, “In 2016 alone, we executed over 200 free capacity building workshops, aimed at enhancing investor understanding of the workings of the capital market.

The multiplier effect of these workshops is phenomenal, as over 25,000 participating investors have been equipped to make better investment decisions”.

The recently concluded event was organised to educate capital market stakeholders on ‘The role of Dematerialisation, Direct Cash Settlement and E-dividend in the development of the Nigerian Capital Market’.

According to Bajomo, the NSE’s Investor Clinic brings to the fore the importance of dematerialisation in ensuring improved market velocity and integrity as well as the role of direct cash settlement in enhancing investor confidence by ensuring that proceeds from the sale of securities are remitted directly into investors’ accounts.

He stressed the importance of e-dividend in not only reducing the perennial issue of unclaimed dividend growth but in ensuring that investors derive the full benefits of their investments by having their dividends paid directly into their bank accounts as soon as these are disbursed by issuers, regardless of whether these are savings or current accounts.

He added that, “At the NSE, we are committed to improving overall financial literacy and inclusion in the country, and ensuring we implement efficient processes that provide investors easy and intuitive access to grow their wealth.

Over 200 participants attended the NSE’s Investor Clinic, which had seasoned and certified subject matter experts, such as Mr. Henry Rowlands, Director, Capital Market Development, Securities and Exchange Commission; Mr. Seyi Owoturo, CEO, United Securities Limited; and Mr. Kenneth Nwafor, Operations Manager, Market Operations NSE as facilitators.

Meanwhile, a delegation from the Northern Governors Forum on Monday embarked on a visit to the South East and South South geo-political zones of the country in efforts to douse tension and promote peace and dialogue among all sections of the country.

The team, led by the Chairman of the Forum and Borno State Governor Kashim Shettima, comprised other state Governors: Aminu Bello Masari (Katsina); Aminu Waziri Tambuwal (Sokoto); Abubakar Atiku Bagudu (Kebbi) and Simon Lalong (Plateau).

A statement issued by Tambuwal’s spokesman, Malam Imam Imam, on behalf of the other Governors, stated that : “The delegation will hold meetings with their counterparts in Rivers, Abia and Imo states.

“Apart from the visit to political leaderships in those states, the delegation is expected to meet with traditional and religious leaders. They will also confer with Northerners resident in those states.

“Importantly, the delegation will reassure their counterparts in the South South and South East that all Nigerians are free to stay in all parts of the country, especially in the North, and that the entire North stands with the people of South East in this period of heightened tension”.

The visit has the blessing of President Muhammadu Buhari and the consultations will continue with all stakeholders so as to enhance unity and peace in the federation.

In a related development, the Senate President, Dr. Bukola Saraki, on Monday, faulted the proscription of IPOB by Governors of the South-East states and the categorisation of the group as a ‘terrorist organisation’ by the Nigerian military.

The Senate President described the action by the governors and the Military as unconstitutional, urging President Muhammadu Buhari to make quick amends by reversing the decisions.

Saraki made this known in a statement he personally signed, stressing that, “The laws of Nigeria had made clear provisions for taking such actions” just as he insisted that that the South-East Governors and the Military did not follow due process being before making their declarations on IPOB.

He said: “I am sure the President will do the needful by initiating the right process. This will go a long way in demonstrating to the world at large that we are a country that operate by laid down process under every circumstance. So, those who have been hammering on this point should maintain their cool.

Saraki, however, appealed for calm in the South-East zone of Nigeria following clashes between soldiers and members of the Independent People of Biafra (IPOB) in Aba, Abia State, stating that the Senate had set machinery in motion to investigate the crises.

He said it is only under an atmosphere of peace that Nigerian could collectively find amicable solution to the current problem in the South-East while not allowing the situation to worsen.

He appealed to commentators and those he described as purveyors of information on all media platforms to be conscious of the need, at all times, to maintain the unity of the country.

He particularly warned users of social media in particular to also desist from promoting hate speeches while preventing information capable of aggravating the crisis at hand from circulation.

He added: “We must all protect and strengthen our country rather than contributing to her collapse and disintegration.

“Our brothers and sisters in the South-East, in particular, should continue to maintain peace and tranquility and go about their lawful
business. This crisis will not benefit anybody but would only expose innocent people to unwarranted danger.

Saraki also hailed Nigerians outside the South-East who he said have worked to ensure that the crisis does not spread to other parts of the country, stating that they all deserve commendations.

“I therefore call for continued efforts to sustain peace, unity and stability in all our communities so as to ensure that all residents, no matter their religion, tribe and creed remain protected and safe under the law,” he added.

Saraki further said: “We must commend the military for their efforts in restoring peace to different parts of the country and sustaining the unity of the country. However, in the face of provocation, the military should allow themselves to be guided by their training which emphasises respect for human rights, even in war. Also, giving the nature of this particular situation, the military has every reason to be hesitant in the use of force.

“Also, it is my view that we should not over-stretch the military. We need to protect our military against dissipation of their fighting strength. And this means we need to strengthen the police and equip them with the capacity to deal with civil crisis. That is why we, in the National Assembly, are already reviewing the Police Act and also looking at the possibility of enabling other para-military agencies to help in curbing civil unrest and maintenance of law and order.

“I want to also make it clear that the National Assembly intends to embark on a fact-finding investigation aimed at determining what actually happened during the period of the military exercise in the South-east. We want to be able to sift the facts from the fiction and determine who did what. It is quite clear that all the facts are not yet known. We assure Nigerians that there will be no cover up. We intend to lay the facts bare.

“On a long term, we want to remind Nigerians that the reason for embarking on constitution review by the National Assembly was to enable us look into issues that are agitating the minds of Nigerians and creating tension among us.

“We have promised that the exercise would be continuous. We intend to keep that promise by further taking decisions that would strengthen and improve on our structures. The Eighth National Assembly, on resumption, will play its constitutional role by addressing all those issues that are agitating the minds of our people and over which they feel so strong”.

Bonny Amadi, Adesola Afolabi, Lagos and Olufemi Samuel, Abuja