Whats your opinion? After people have lost millions in the Nigerian Stock Market last year, do you think the government should bailout the nigerian stock market? I think this will help investors recover some of the money they have lost, and will also help kickstart the stock market and the nigerian  economy. Even the US and other European countries are offering their economies bailouts in on form or the other. Some people seem to disagree with this
http://www.stockmarketnigeria.com/2009/03/05/re-bailout-of-the-nigerian-capital-market-not-an-option/ .

Where will the money come from?

I don't see a reason why the government have to inject funds into the stock market. Direct injection of funds into the stock market is only going to prolong our problem. The idea might spurred sentiments and drive stock market growth on the short term (3 to 6months), but it is not going to solve our problem. It is a matter of time before people realize that the funds fueling this growth is not going to be continous, and will eventually dry up one day. And after that, people will change their position and dump their stocks all at once. The stock market will nose dive again with people capitalizing on their short gain, taking us back to our initial position.

Rather injecting funds into the stock market, I think the funds should be utilized to improve market efficiency. We can do this by improving the environment at which these companies operates. Putting the necessary enablers in place for them to operates efficiently and successfully. If market efficiency improves, this will expose opportunities and threat within the market. Sound stocks will resurface again giving people the opportunity to analyze and value company accordingly. Competition will reign forcing unsound stocks to perfect their game if they want to live to see another day. I believe all those sound stocks that have shed 60-70% of their market value will eventually come back to their level. what drove people away back then will definitely bring them back.

Reps throw out capital market bail-out motion
By John Ameh, Abuja
Published: Thursday, 12 Mar 2009

A motion seeking financial succour for the troubled capital market was rejected by the House of Representatives on Wednesday.

The motion, entitled, ?Urgent Need for Federal Government?s Intervention in the Nigerian Capital Market,? was moved by the Chairman of the House Committee on Capital Market, Alhaji Ahmed Wadada and 24 others.

They were, however, met with stiff opposition by the majority of members at Wednesday?s plenary.

The majority had argued that a wiser option would have been for the sponsors to ask government to bail-out ailing manufacturing industries and fix collapsed social infrastructure in the country.

The motion was thrown out amidst speculations that some members might have compromised themselves in supporting the motion, described as ?commercial motion.?

Some influential personalities at the Nigerian Stock Exchange were believed to have pushed for the House to pass the motion.

The motion surfaced on Wednesday, following a series of meetings between the Director-General of the NSE, Prof. Ndi Okereke-Onyuike, and members of the Committee on Capital Market.

The Deputy Chairman of the committee, Alhaji Abubakar Maifata, alluded to the allegation of compromise, when he complained that his privileges as a legislator had been breached by the conduct of his colleagues, who made the allegation.

He said, ?Mr. Speaker, I heard some of my colleagues saying that the motion should be killed because they called it a commercial motion.

?That is unfortunate. We members of the committee sat down and agreed on the merit of this motion. It was not even Wadada?s idea because he was not aware when we took the decision.?

According to him, ?We merely asked him to present the motion, being the chairman of the committee. It is unfortunate that some members are saying the motion is a commercial motion.?

Opposing the motion, the Chairman of the Committee on Rules and Business, Mr. Ita Enang, kicked against using public funds to bail-out a market that ran into crisis because of the ?greed? of speculators and the ?inefficiency? of regulators.

Enang said, ?I am surprised that Wadada will bring this type of motion to the House; he used to be the adviser on capital market matters, urging everybody on the success of the market.

?People knew that they were gambling; yet they went into it because they felt it was an opportunity to make quick and easy money.

?Now, you want the Federal Government to use public funds to bail-out the market for a few greedy people to go and mismanage it again.

?By the way, where will the money come from? There is no provision for it in the 2009 budget.?

Supporting Enang?s argument, the Chairman, House Committee on Information and National Orientation, Mr. Dino Melaye, blamed the current situation on banks, which saw the momentary success of the market as an opportunity to rake billions of naira into their coffers.

?Government has no business bailing out the capital market; let us use the money to bail out the manufacturing sector and generate employment.

?We were all here in 2008 when banks made so much money from the capital market that they were even returning money to share subscribers. What happened to all that money?, stated.

Wadada had made two prayers in the motion namely, to ?urge the Executive arm of Government to come up with a bailout package to finance the downward slide in the prices of stocks in the Nigerian Capital Market.

?Further urge the Executive to overhaul the entire institutional structures in the financial system in order to strengthen them to cope with the situation.?

He recalled that the current global financial meltdown had led to the withdrawal of around $200bn from the market by foreign investors.

Locally, Wadada told the House that over 70 per cent of investment had been lost by subscribers.

We warned that banks might soon begin to feel the impact the crises in the market considering the fact that they were major stakeholders in the system.

When the Speaker, Mr. Dimeji Bankole, put the motion to vote, the ?nays? overwhelmed those backing it; hence the motion was throw out.

The House also reversed itself on the decision it took last week to stop the bill on the regulation of the award of national honours from scaling through the Second Reading stage.

The sponsor of the bill and Leader of the Action Congress, Mr. Femi Gbajabiamila, reintroduced the bill on Wednesday through Order 9, Rule 1 (6).

The House endorsed a motion he moved to reintroduce the bill, meaning that it would be tabled again for debates by members.

The bill is seeking the confirmation of the names of national honour recipients by the National Assembly before the President can confer the awards on them.

The aim is to control the indiscriminate award of honours to non-deserving individuals either for political or other parochial reasons.

Last week, there was disquiet in the House after Bankole stopped debates on the bill by ruling in favour of those opposing it in a voice vote.

It later turned out that though the bill came from the AC minority leader, it had the support of most members of the House.

http://www.punchng.com/Articl.aspx?theartic=Art200903122245037

Capital market crisis: Reps lose 70% investment
Bola Badmus, Abuja - 12.03.2009

Senators and House of Representatives members of the National Assembly may each have lost about 70 per cent of his investments to the ongoing slump in the capital market. House of Representatives Committee on Capital Market chairman, Honourable Aliyu Wadada, disclosed this on the floor of the chamber on Wednesday while arguing a motion on the need to pass a resolution to urge the Federal Government to intervene in the capital market by way of a bailout.


According the Wadada, with the present situation of the capital market, available records showed that most federal lawmakers may have lost over 70 per cent of their investments to fall in share prices and other market instruments.


He argued that at this point it was imperative that the Federal Government should be asked to bail out the market to save it from collapse.


However, he said he was not in a position to determine the level of government bail out. Others co- sponsors of the motion also shared in the sentiments but majority members opposed the motion on the grounds that investment risks should be borne by the respective investors and not government using tax payers? money.

http://www.tribune.com.ng/12032009/news/news16.html

Intresting!
Go

courage89:

Capital market crisis: Reps lose 70% investment
Bola Badmus, Abuja - 12.03.2009

Senators and House of Representatives members of the National Assembly may each have lost about 70 per cent of his investments to the ongoing slump in the capital market. House of Representatives Committee on Capital Market chairman, Honourable Aliyu Wadada, disclosed this on the floor of the chamber on Wednesday while arguing a motion on the need to pass a resolution to urge the Federal Government to intervene in the capital market by way of a bailout.


According the Wadada, with the present situation of the capital market, available records showed that most federal lawmakers may have lost over 70 per cent of their investments to fall in share prices and other market instruments.


He argued that at this point it was imperative that the Federal Government should be asked to bail out the market to save it from collapse.


However, he said he was not in a position to determine the level of government bail out. Others co- sponsors of the motion also shared in the sentiments but majority members opposed the motion on the grounds that investment risks should be borne by the respective investors and not government using tax payers? money.

http://www.tribune.com.ng/12032009/news/news16.html

Intresting!
Government should use our public funds to bail out the stock market because our law makers used our public funds to invest in the market.
What about the people who don't have enough to eat, not to talk of investing. Who is going to bail them out.
Arrant nonsense. Stupid lawmakers! God don catch them.