"The so-called booming stock market has now been shown up as a charade. The pricing of the stocks was clearly not founded on any real basis. In other words, the regulators were culpable of winking at the phantom pricing and manipulation of stocks that took place.

In a turbulent week, investors have voted with their warrants and run for cover from a stock market in great disequilibrium. Offloaded were millions of shares of listed banks in the nation's capital market. And it is not only stocks of the troubled banking sector that are in a nosedive; most other stocks appear to have taken a big hit. The extent of the damage is staggering: investors suffered a total loss of abut N519 billion as bank stocks and other blue chip stocks suffered share price depreciations.

The alarming depreciation calls into question the regulatory efficacy of the regulatory bodies, principally the Securities and Exchange Commission (SEC) and the Nigeria Stock Exchange (NSE). What has happened is not just a case of (to use Alan Greenspan's phrase) 'irrational exuberance' but rank ineptitude. Ordinarily the activities of the stock markets can be dismissed with a wave of the hand as impacting only on the activities of a miniscule section of the population. However, sadly, there are wider issues which ought to be of concern.

For a start, pension fund managers are statutorily allowed to invest up to 25 per cent of their portfolio in stocks. The recent plunge brings to the fore once again the issue of whether this ceiling is not too high. This debate is not limited to Nigeria, but is now an issue of worldwide concern. Given the lack of openness in the Nigerian system and the laissez faire attitude towards sound corporate governance, it is not out of place to ponder on whether the pension fund administrators have actually overshot the statutory limits. We hope not, but the pensions regulatory authorities must be ever vigilant. Full disclosure is needed here!

The cause of public indifference to the travails of the sector is straightforward. There is a widespread sentiment that the country's economic thrust in the recent past has been skewed towards the promotion and protection of a privileged sector and favoured sections. In a situation where the briefly booming stock market hardly had any impact on living standards, this cannot be surprising. There is understandably a lot of disillusionment in the land. The question is perennially asked, what about the other sectors? Outside of the financial services sector, where, pray, is a bail-out policy? Or, as a famous band of the 1960's, THE CHRISTIANS, intoned, 'When will there be a harvest for the world?'

More plainly, whence cometh the bounty for Nigerians outside of the pampered financial services sector? The promised N70 billion bail-out for the textile sector (big employers of labour) has not exactly hit the ground running. The N200 billion agricultural fund is not having the re-invigorating propensity envisaged. This means that, assessed across the board, all those areas of linkages with the capacity to generate employment and multiplier-effects to kick-start the economy are being neglected.

There is an important lesson here: we must build an economy based on linkages, or synergistic connections between sectors. The so-called booming stock market has now been shown up as a charade. The pricing of the stocks was clearly not founded on any real basis. In other words, the regulators were culpable of winking at the phantom pricing and manipulation of stocks that took place. Now that the bubble has burst, much more contrition and sanctions are needed than being shown at the moment. The SEC and NSE have clearly failed the investing public, and heads should roll to serve as a future deterrent. We think that, for a start, the Director-General of the NSE, Mrs. Ndidi Onyuike-Okereke, should do the honourable thing by bowing out. This will send an unambiguous signal that a fundamental, hopefully irreversible, process of correction is in place.

The breakdown of the stock market pricing mechanism was a disaster well foretold. It will take time to rebuild public confidence in the mechanism, but it has to be rebuilt, this time on the foundation of serious and sensible corporate governance, integrity, fair trading and trust. Meanwhile, the lesson to be learnt is clear: it is not a 'booming' stock market that makes for sustainable economic development, but investments in knowledge, skills acquisition, infrastructure and real production. The ridiculous exuberance of the stock market, in the recent past, exposes once again the fairy-tale existence of the 'rentier' state.

Cast in different words: put thy trust in production of tangibles and not in speculation.