Why the NGX must dance carefully

The recent visit of the Board and Management of the NGX to the President garnered significant media attention. In the aftermath, the General Manager of the bourse made a bold claim that over half a million millionaires had been created under the current administration. While the NGX is entitled to celebrate its successes, it must exercise caution not to appear as a state entity, particularly during this election period.

The bourse must safeguard its independence, uphold its free market ideology, and remain accountable to its shareholders, markets, and regulators. It is crucial that the NGX refrains from becoming a platform for partisan politics, which could tarnish its reputation as a neutral catalyst for wealth creation and economic growth. The claim of half a million millionaires created is misleading, as economic downturns can inflate such figures due to high margins and profits, potentially leading to profiteering.

Moreover, the limited float in many high-capitalized stocks can cause demand to outpace supply, driving prices up and leaving institutional shareholders with declining paper values. The NGX must distance itself from partisan politics as the election looms, lest it becomes a target for opposition parties. For instance, Geregu's missed repayment schedule could be exploited by politicians, turning the market into a battleground and causing investor panic.

The NGX, as a self-regulatory organization, must carefully guard its independence and neutrality to avoid being dragged into politics. The author expresses concern that the NGX may be caught up in partisan considerations, which could lead to its downfall. He urges the NGX to remain vigilant, as its leaders possess the necessary expertise to handle this delicate situation. Failure to heed this warning could have severe consequences for the NGX's reputation and stability.