The continued rise in insecurity in the country, if not checked, may result in another bleak year for investors in shares on the Nigerian Stock Exchange as it is presently taking a toll on investors’ confidence in the market.

The Managing Director, Partnership Investment Company, Mr Victor Ogiemwonyi, who made this disclosure during a discourse last Thursday, noted that the current level of insecurity,  aside resulting in low inflow of Foreign Direct Investment (FDI) would make institutional investors to look for other stable economy to inject their fund.   

The investment analysts said that the impact of the sectarian violence, political instability and ripple effects of Euro economic crises had brought the Nigerian Capital Market and investors’ confidence to its lowest status in recent years. He said the country was currently facing a high level of capital flight, and declining interest of foreign investors in the economy.

According to him, the huge impact of these crises reminds the country’s investors that they are part of one unified global entity, as seen in the impact of the Euro economic crises in emerging markets like Nigeria. He said that the crisis in Europe had increased the rate of capital flight in the country, thereby  reducing the rate of capitalisation at the NSE.

Ogiemwonyi said that as the market was about adjusting to that, the Euro crises ensued, leading to more capital flight. The impact of the crises reminded Nigerian investors that  “The level insecurity has increased, and has hampered investors’ confidence in the country. Don’t forget that the stock market is a barometer for measuring a country’s economy. The insecurity in the country affects foreign Direct Investment and investors’ confidence. This is because crises bring uncertainty, which also affects investors’ confidence,” he said.

He further explained that the level of security guaranteed in any country determine whether the country would grow or not.