Withdrawal of $15bn by foreign investors compounds capital market’s woes – CBN
THE Central Bank of Nigeria (CBN), on Wednesday, further gave an insight into the near collapse of the nation’s capital market, saying that the withdrawal of over $15 billion by foreign investors in the wake of the global meltdown, as well institutional abuse, exacerbated the crisis facing the sector.
The apex bank also publicly admitted that some of its policies and failure of other regulatory bodies contributed to the capital market crises in the country.
Those blamed by the CBN for the near collapse of the capital market included the Security Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE).
The CBN Deputy Governor, Financial System Stability, Mr Kingsley Moghalu, who made this known while addressing the House of Representatives ad hoc committee on capital market, headed by Honourable Ibrahim El-Sudi, equally blamed the near collapse of the capital market on some banks, through manipulation of share prices.
He also noted that perceived uncertainty in the economic environment, particularly the Niger Delta crisis at that time, panic recall of margin and share loan facilities by banks caused many investors to sell their stocks.
Mr Moghalu accused management of some of the Nigerian banks of manipulating their shares through some stock broking firms.
He said the intervention of CBN in the banking sector was “to safe the sector from total collapse, considering the level of non-performing loans of the eight banks, as well as level of indebtedness worth hundreds of billions.