These are truly trying times for investors in the Nigerian equity market. The market is illiquid and has been on an interminable downtrend. By last Monday, The Nigerian Stock Exchange had lost 13.05 per cent on a year-to-date basis, and it looks like it is nowhere near the bottom yet. Not a few investors have been ruined.
In the light of the growing lackluster performance of the market, the question begging now for an urgent answer is how to stem the tide that is fast eroding investment value and impoverishing a cross-section of the population, while denying companies the financing opportunity that a stock market ordinarily offers.
Apparently, the solution to the problem of the market is the restoration of investor confidence. But this creates its own quandary as there is no clear and shared understanding of what “investor confidence” means in the Nigerian context, or so it seems.
The loss of investor confidence was one of the reasons the Securities and Exchange Commission (SEC) gave when it moved with extreme prejudice to terminate the immediate past leadership of the stock exchange.
With SEC’s raison d’etre in mind, last April at the end of his term as Interim Administrator of the Stock Exchange, Mr. Emmanuel Ikazoboh announced that investor confidence had been restored to the market. Investor confidence was defined by movement in the All-Share Index.
However, and curiously, the All-Share Index had between the appointment of Mr. Ikazoboh and his exit fallen from 25, 691.30 to 25, 293 points. Also, it seemed not to matter that volume (liquidity) was in retreat and the News Issues market was comatose.
The index has since taken a further plunge and liquidity has virtually dried up. From 25, 293.16 points as at 29th April 2011 the index closed last Monday at 21, 538.04 points. Meanwhile, the New Issues market has remained down for the count, with issuers and their advisers shy of entering the market for fear of ending up with failed issue. What then has happened to the celebrated return of investor confidence following the removal of Professor Ndi Okereke-Onyiuke?
The new leadership at The Nigerian Stock Exchange has assured that it is working to restore investor confidence, which seems to be an unconscious confession that the return of investor confidence announced by Ikazoboh and SEC in April was falsehood, an unabashed piece of Goebbelian propaganda. According to Mr. Oscar Onyema, Director General/Chief Executive Officer of The Stock Exchange, The Exchange is in the light of present challenge doing more in the area of investor education and may upgrade its new Training Unit to a Training School.
Also, Mr. Onyema said The Exchange was strengthening its approach to regulation, following which it had placed 48 companies on technical suspension.
However, the problem is that even though Onyema correctly stated that investor confidence was “a factor of so many things”, he did not indicate the “many things” The Exchange and other stakeholders are doing to restore investor confidence. The Exchange by itself cannot restore investor confidence, if indeed investor confidence is a factor of many things. 
Also, it is not enough that The Exchange said it is “strengthening regulations”, working to “educate investors”, and considering the introduction of “new products”. There should be consistency in how these initiatives relate to existing policies and to one another.
Beyond what it is doing, the inactions of The Exchange count. Investors look at its body language. The Exchange should walk its talk. What rules is The Exchange strengthening when it sat back and watched investors suffer avoidable losses as a result of the way the matter of the “rescued banks” was handled on the trading floor? Why did it take forever to place the shares of the rescued banks on Technical Suspension? The Exchange by its inaction encouraged speculation in the shares of the rescued banks to the disadvantage of a majority of investors who had no idea of what the Central Bank of Nigeria (CBN) actually thought of those banks. 
Investors are also interested in what SEC is doing or not doing. Furthermore, they are looking at what is coming out of the CBN and Aso Rock, including the security situation in the country. Has any body thought of the effect of the recent nationalization of three banks on investor confidence, especially from a foreign investor perspective? Whatever the official reason for the takeover of those banks, nationalization is still a pariah word in today’s liberal market economy. Any thing else is a denial of this reality and cannot sway investors to vote for the market in its present state.  
This is taking a holistic view of investor confidence – which is what it should be, not the narrow self-serving perspective and series of discrete and uncoordinated activities that have only worked to further weaken the stock market and impoverish Nigeria’s emergent investor public.