The Securities and Exchange Commission, SEC, says it has intensified efforts to attract more retail investors into the nation’s capital market.
SEC’s Director-General, Dr Lamido Yuguda, made the disclosure while addressing participants at the 2020 Annual workshop of the Capital Market Correspondents Association of Nigeria (CAMCAN) in Lagos.
Yuguda, who decried low participation of retail investors in the capital market, said that the commission’s vision was to attract more players to deepen the market.
Yuguda, who was represented by the Director, Lagos Zonal Office, SEC, Mr Stephen Falomo, said the commission had identified some challenges hindering retail investors from accessing the market.
He assured stakeholders that the commission was making more efforts toward attracting retail investors into the market.
“Currently, investors with multiple accounts are being allowed to consolidate their accounts into a single one and claim their accrued dividends.
“This is in a bid to encourage more domestic participation in the market.
“In deepening the market, we are exploring various avenues to increase the number of companies and instruments in our market, thereby raising the market capitalisation,” he said.
Yuguda said the commission took some strategic initiatives to boost market activities and crystallize the growth of the Nigerian Capital Market.
He said that the initiatives were taken to cushion the negative impacts of the COVID-19 pandemic on the capital market.
The director-general added that the committee on COVID-19 had continued to provide support and equipment toward combating the pandemic and its effects.
According to him, SEC has continued to leverage on its business continuity plan and those of its operators to ensure that capital market activities would be carried out with little or no disruption.
A Professor of Capital Market at the Nasarawa State University, Keffi, Uche Uwaleke, advised that efforts should be geared toward partial privatisation of the Nigerian National Petroleum Corporation (NNPC) and the refineries.
Uwaleke spoke on “Capital Market in Post COVID-19 Nigerian Economy”.
He said that proceeds derived from the privatisation should be used to recapitalise development banks such as the Bank of Industry and Bank of Agriculture.
According to him, the recapitalisation will enable the banks to support small businesses while the Central Bank of Nigeria (CBN) will focus more on its monetary policy function.
“The way to go is not just to commercialise NNPC.
“The new Petroleum Industry Bill is talking about commercialisation while the former one talked about privatisation through the stock exchange which is the way to go.
“We must privatise within the first five years of incorporating a new company in Nigeria, that company must be listed on the stock exchange.
Ten per cent of the company should be privatised,” he said.
Uwaleke noted that commercialisation of a company would still make it to be 100 per cent government-owned.
“The problem will still be there. Can you cite any international oil company that is 100 per cent owned by government which is doing well?
“The solution for us is to privatise refineries because we cannot continue to run them as government’s. We can put the proceeds of the privatisation in critical budget.
“The development banks are not doing enough because they do not have the capital and that is why CBN is now burdened. The CBN is doing more of development function than monetary policy function.”
Uwaleke said provision of incentives to companies listed on the securities exchanges would go a long way to attract more firms to list on the capital market.
He said: “Today, companies’ income tax is 30 per cent . It favours the government if companise are incentivised to list because government projects more taxes as a result.
“If government can reduce the tax rate of companies that are listed as an incentive, many more companies would come to list on the exchange.”
