SEC’s Capital Market 2011 Review and Projections for 2012
February 22, 2012
LAGOS - As part of its regulatory actions, the Securities and Exchange Commission (SEC) has again restated its commitment to Investors Education and sensitisation exercises on equities investments for retail investors.
The Director General of the Commission, Ms. Arunma Oteh says recently that her experience with some investors at some of the town hall meetings reveals that most Nigerians invest ignorantly in equities, some with a thought to opening a savings account. While addressing a variety of Finance Journalists at the 2011 SEC’s Nigerian Capital Market Review and Forecasts 2012, Oteh maintains that the prevention of misinformation in the market is more critical to the Commission.
Regulatory analysis from the Commission reveals that the Nigerian Capital Market declined in fragility by -16% in the year 2011 as against the 2010 uptrend witnessed on equities. While the Market capitalisation closed at N6.5 trillion, the All Share Index from year 2012 reboots from a position of 20,730.63. Oteh attributes the nosedive effects on the market to a “contagious impact” from the global market.
According to the reports, in year 2011, the 28 Bonds issued in the market totalled N79b billion naira, that of States (Delta, Ekiti, Niger and Benue) and Corporate Bonds collectively amounted to a tune of N84 billion. Giving that in the year just ended, there were 16 new Issues; 6 Rights Issues; 9 Private placements and 1 preference share Issue, totalling N142 billion, the market enjoyed increased inflow of foreign portfolio investment to the tune of N478 billion naira.
Addressing the Demutualisation Agenda of the Nigerian bourse, the DG stated that SEC’s “Industry-wide Committee” is set to deliver its recommendations on the Demutualisation of the Exchange based on studies from other Exchanges around the globe.
As part of the Commission’s Focus for the year 2012, Oteh expresses determination in the revitalisation of the Abuja Securities and Commodities Exchange (ASCE) Commission adding that an international expert has concluded the assessment of the ASCE. Other areas the Commission has earmarked for its fruitful oversights include.
1.Monitoring of organisational compliance with the implementation of the Code of Corporate governance
2.Stronger Public enlightenment through the deployment of resources and investor education mechanisms to appeal to various target groups.
3.Leveraging technology for regulatory and market efficiency, ensuring that market operators acquire minimum level of Information technology support for efficiency and transparency in the market.
4.Development of the Housing and Finance sector
5.Increased market participation
6.Targeted listing of Critical sectors of the Economy; The Oil & Gas, Telcos and Agriculture
7.Boosting Investors Confidence as its primary emphasis
8.Solving the problem of unclaimed Dividends, which currently stands at N41 billion naira, a reduction from the N44 billion of the previous year. Here the SEC in 2012 targets an outstanding reduction of the unclaimed dividends by 50%
9.Market Deepening, which implies the diversification of the market offerings and product types in the market.
10.Conversion to International Financial reporting Standards (IFRS)
11.Capacity Building; the training and retraining of the SEC staff based on a strategic relationship within the IOSCO, US SEC, Oxford University, Guarantco and other relevant training modules.
12.Stronger backing to the NSE, and
13.Whistle blowing to keep up with international best practices and improving its regulatory and market development processes.
With the Nigerian Capital Market constantly being perceived as an enabler of socio-economic development, retail and institutional investors have in recent times displayed at public forums their meticulousness at permeating equities with funds. The regulatory goals of Nigeria’s Security and Exchange Commission (SEC) for the year 2012 is nonetheless one of the yardsticks now pegged for quantifying the confidence restoration in the market.