A Professor of Economics at the Covenant University, Ota, Ogun State, Philip Alege, has said the level of stability of the stock market of any economy plays a significant role in attracting foreign investors.
Alege, while delivering the 21st inaugural lecture of the university recently, also said the stock market was vital to sustainable equity financing for worthy investments and capital formulation.
He said, “The more educated the investors are in the market, the more volatile is the market. The average education level of investors can thus be seen as a vital non-macro-economic variable that influences stock market price volatility in Nigeria.”
The don also urged Nigerians to consume products produced locally to boost the country’s foreign exchange. “Consumption pattern among households could also determine the level of import of consumables and the volume of exports within the economy at any given time. This equally has implications for the exchange rate of the local currency about its dollar equivalent.
“When most of the consumables are imported, and fewer products are exported, this could create a significant imbalance in demand for foreign exchange resulting in a deficit of the balance of payment issues. In Nigeria, there is more preference for foreign goods despite the excessive cost associated with the demand compared to indigenous consumables,” Alege said.