This is a problem faced by many other countries but efforts are continually being made by the Commission to increase retail investors’ participation in the Nigerian capital market.
From left; Head Economic Research Securities and Exchange Commission, Dr. Afolabi Olowookere; Head, External Relations (SEC);Mr. Sufian Abdulkarim; Representative of SEC acting DG,Mr Okey Umeano; and Chairman, Capital Market Correspondents Association of Nigeria (CAMCAN)Mrs Chinyere Joel-Nwokeoma, during the Capital Market Correspondents of Association (CAMCAN) forum themed: Strategies to deepen retail investors’ participation in the Nigerian Capital Market sponsored by the Securities and Exchange Commission (SEC) held in Lagos
Speaking as a Guest Speaker at the Capital Market Correspondents Association of Nigerian (CAMCAN) crucial Forum, Ms Mary Uduk, acting Director-General SEC, said this is our collective responsibility to continually engage in programmes where brilliant ideas that would benefit our market and economy are birthed.
This is because there is a correlation between increased market participation and capital market growth, she added.
The Capital Market Correspondents Association of Nigeria forum was sponsored by the commission held in Lagos with the theme, “Strategies to deepen retail investors’ participation in the Nigerian Capital Market” which is indeed an interesting and apt one, given our current market realities, and the need to increase participation of retail investors in the market.
Uduk who was represented by the Head, Office of Economics at SEC, Mr Okey Umeano noted that Capital markets across the world have products and mechanisms to stimulate economic development. Although many of such products are available in Nigeria, there are aspects that are still untapped, thereby limiting the realization of our potential.
“Another challenge is investor apathy in spite of abundant capital market products.”
The Acting DG stated that in this year and as a Commission, we plan to drive the following market initiatives, all in a bid to restore investor confidence thereby increasing participation in the market:
- Deployment of Real Time Automated Market Surveillance System;
- Driving the growth of Collective Investment Schemes (CIS);
- Capital market literacy and completion of the infusion of capital market into schools’ curricula;
- Further and robust engagement with sister agencies like CBN, PENCOM, NAICOM, etc, to ensure consideration of the capital market in policy making;
- Leveraging the success of the e-Dividend initiative to drive Direct Cash Settlement and solve the multiple subscription problem;
- Implementing minimum operating standards for operators;
- Continue to drive down time-to-market for issues
- Mainstreaming the CMMP into national economic policies;
- Driving adoption and development of Financial Technology (FinTech) and innovation in our market; and
- Developing the commodities and derivatives space, among others.
She stressed further that over the years, as the market recovered, the Securities and Exchange Commission, in conjunction with other self-regulatory organizations (SROs), has continued to enhance the regulatory framework through various policy reforms and initiatives to boost investors’ confidence, sustain market recovery and put the market back on the path of growth and development. There is therefore the need for increased participation of local (retail and institutional) investors in the market and for foreign investors to have higher confidence concerning the safety of their investments.
In terms of rule-making, ms Uduk said the Commission continues to develop robust rules in line with global best practices that would foster investor confidence, build an enabling regulatory environment and increase participation.
She noted that “Notwithstanding the numerous initiatives and strategies being implemented, the Commission realizes that more still needs to be done. Our market’s performance is reasonably influenced by activities of foreign investors such that their instantaneous exit poses a challenge. This is a problem faced by many other countries but efforts are continually being made by the Commission to increase retail investors’ participation in the Nigerian capital market. The Commission believes that there is a nexus between increased market participation and market efficiency.
In Her Words: “We are prepared to provide the necessary support to CAMCAN in the area of capital market awareness campaigns. This is with a view to making you properly positioned to deliver on your mandate as the fourth estate of the realm. I want to charge CAMCAN to sustain its efforts at ensuring that capital market activities are covered in print, electronic, and online media. This sustained news reportage can help increase retail investors’ participation, and would not only boost the capital market but the economy as a whole.
In conclusion, she said “let me reiterate the obvious, that in today’s world, we all face a common challenge, which is the challenge posed by globalization and the need to work out a framework to gain and prosper from it. The current COVID-19 pandemic with its dire consequences (cutting of the 2020 budget by N1.5 trillion, reduction in capital expenditure, likely increase in unemployment, decrease in government revenue, underperformance by sub-national government, etc.) on our economy is a wakeup call for us to truly and quickly diversify the economy. This can only happen if we as individuals, institutions, operators and the media work together in the true belief that mutual help is the best form of self-help – Together, we can move the Nigerian capital market and the economy to higher grounds.