12 Sep 2011 / By Obinna Chima
Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, at the weekend attributed the uninspiring performance displayed by equities listed on the banking sub-sector of the Nigerian Stock Exchange (NSE) to the downturn in the global stock market.
Sanusi, said this in a chat with newsmen at the end of the ‘Nigeria Sustainable Finance Week,” organised by Access Bank Plc in Lagos . He said: “First of all, on the issue of banking stock or any stock in Nigeria , we have to look at it within the context of global stock market performance.
Wall Street is not trading well; Europe is not trading well also. This (the NSE) is a market that also has a lot of foreign funds and we have the sovereign debt crisis in Europe and unemployment issue in the United States . So what is happening in Nigeria is not necessarily tied to the local market, but also to the global market, because the funds don’t just come from the local market.
“As for the banks, it is natural that if you are having mergers and acquisitions, people will wait. Most of the shares (rescued banks) are on technical suspension, as soon as the process is completed, then we will begin to see upward movement in stocks.”
Commenting on the September 30 recapitalisation deadline, the CBN Governor expressed high optimism that the five rescued banks would scale the hurdle.
“I am very confident that all the banks will meet the September 30 deadline. All the banks are having their Extraordinary General Meetings (EGMs) very soon. The three that have been recapitalised by the Asset Management Corporation of Nigeria (AMCON) are already out of the road and the other five will be through by the end of September. We have given them three months to show the market that they are on their way to integration. I have no doubt that by end of September, the crisis will be over,” Sanusi explained.
He maintained that the adoption of the Chinese Yuan for the country’s forex reserves would help diversify Nigeria ’s holdings.
He added: “I have been very clear that we are diversifying our reserves and the reason is that you can no longer ignore China . China is the second biggest economy in the world. And actually, just yesterday (last Thursday) after I left China , I learnt that the Chinese government has indicated that the Yuan will be fully converted by 2015. It is a currency that represents one of our major trading partners and this is something that we can use for settlement of trade transactions.”