Thursday 31 May 2012


STOCKBROKERS TO GET FORBEARANCE PACKAGE FROM FG
Finance Minister Ngozi Okonjo-Iweala says the Federal Government will release a forbearance package to stockbrokers as part of measures to stimulate confidence in the Nigerian capital market and increase liquidity.
The minister said this, on Thursday, at the ongoing Annual General Meeting (AGM) of the African Development Bank (AfDB) in Arusha, Tanzania.

The Nigerian capital market since the onset of the global financial depression in 2008 to March 2012 lost N4.6 trillion due mainly to the effects of banking consolidation and investors loss of confidence.

Estimated debt overhang, arising from margin loans incurred by stockbrokers also stood at about N300 million.

Okonjo-Iweala said that while government, through the Assets Management Corporation of Nigeria (AMCON),
  had intervened successfully and safe guarded the banks, the request for forbearance package by the stockbrokers would also be granted.

"We are working on the forbearance; we have now agreed on it, and that we are going to implement it. We are having discussions about how to do it," she said. "We must remember that we don't want any moral hazard, we don't want those stockbrokers who did the right thing to think that they are not appreciated or that they have been neglected. So we must honour them too by looking at the type of forbearance to be accorded to the stockbrokers who are having difficulty.
 

But there would be forbearance and there would be some conditions attached to that and we would spell that out."

The minister, however, did not disclose when the forbearance package would be released to the stockbrokers, but assured that "the nation's capital market will rebound".

According to her, while it appears that it is taking government a long period, "our commitment is to make sure that we provide sustainable policy guidelines for growth and wealth creation for both the investors and stockbrokers".

The stakeholders in the capital market had in the two years insisted that forbearance remains the only financial instrument needed to re-stimulate market confidence and provide liquidity at the Nigerian stock exchange.

Emeka Madubuike, Chairman of the Association of Stockbroking firms, had told NAN earlier that forbearance was the oil needed to compliment the new trading regulations introduced by the regulatory authorities.

According to Madubuike, stockbroking has become an endangered profession after the near collapse of capital market.








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