Capital market operators have squarely placed their hope for the recovery of the capital market on Mrs Arumah Oteh, the newly appointed Director_General, Securities and Exchange Commission.
The fortunes of the market plunged deeper last year with market capitalisation of the Nigeria Stock of Exchange falling to…. from …….and the All_share index declining to …from. The prospect of the market experiencing significant recovery in 2010, according to capital market operators, largely depends on the ability of the new SEC D_G to introduce reform measures that will instil market discipline and restore investor confidence.
The Abia State born Oteh was nominated by President Yar’Adua to take over from Mr Musa Alfaki whose tenure ended in April last year. Oteh’s resumption was however delayed by a prolonged Senate confirmation process which was concluded in November.
Oteh has over 16 years of capital market experience and before her nomination she was the Vice_President (Corporate Services) of the African Development Bank Group (ADB).She has an MBA from Harvard University, USA and a First Class Honours Bachelor of Science Degree in Computer Science from the University of Nigeria Nsukka. She has received both a Harvard Fellowship Award and a National Merit Award.
Her nomination however generated concern among stakeholders in the market, with some claiming she is not to be qualified going by the Investment and Securities Act (ISA) 2007, which outlines the criteria for appointing a D_G for the Commission. The investors, who cut across both small and large institutions, said the early assumption of office of the SEC DG would give the equities market another lease of life, noting that confidence is needed in the market despite the global economic contraction.
Alhaji Rasheed O. Yussuff, Chairman, Association of Stockbroking Houses of Nigeria (ASHON) said, “We believe the year 2010 would be better though it is going to be tough. The market capitalisation has started picking up hovering between N4 trillion and N5 trillion. We hope it will increase further and stabilise especially now that the oil price has started going up and peace coming from the Niger Delta region. Increase in the price of equities and volume will likely impact on the market. We are ready to work with the SEC and NSE to ensure sanity is restored to the market.”
Mr. O .P. Ezeagu, Managing Director, Solid Rock Securities and Investment Limited, in his reaction said, “We want the SEC to work closely with the entire stakeholders in the market in 2010. We want SEC to recognise ASHON as a Self Regulatory Organisation (SRO) so that we can be able to tackle the issue of infractions effectively.
We need regular interface with the SEC on matters that would develop the market further. Furthermore, we want the SEC to work closely with all the regulatory bodies in the financial system in order to bring harmony and coordination of regulations in the market. We don’t want a situation where there will be conflict of issues among the regulators.”
Commenting on the expectation of the market for 2010, Chairman of the Senate Committee of the capital market, Senator Ganiyu Solomon, said investors had lost so much money because of failure of the regulators of the capital market. “If investors lose their money then we should be talking of regulatory deficiency, so the new SEC DG is now coming at a time when we expect recovery, therefore so much is expected from her to boost investors’ confidence.
He said the stock market was still experiencing the crisis and would need proper regulatory intervention to get it out of the current situation. The onus is now on her to prove to us that she is capable of making that difference that is necessary to restore our confidence.
Mr. Chinenyem Anyanwu, Managing Director, Dependable Securities Limited said, “With the coming on stream of the Asset Management Company (AMC) in 2009 and the return to stability in the global economy, the Nigerian capital market is expected to record significant upward movement.
He said, “We have a very high expectation, we believe that the market outlook is bright, more so, coming on the heels of the many arrangement that are been put in place by the authorities, CBN in particular and the AMC’s and all others, so I believe that the outlook is bright.
Also speaking, Mr. David Adonri, Managing Director, Lambeth Investment and Securities Limited, said that the reforms in the banking sector and the general financial sector, increased regulatory activities by capital regulators, increased awareness on market processes and systems, changes in the management of the Securities and Exchange Commission (SEC) and the NSE among others, are major factors that will drive the Nigerian capital market in the year 2010.
He said, “The Banking sector constitute about 60 per cent of the Nigerian economy, so with the conclusion of the reforms and sanitisation in the sector, I expect that the firm order that will be established in that sector would again start driving the market.
“We have spoken about the macro economy, that if income level improves, the aggregate increase that will then trickle down into the economy will bring about an increase in the demand profile for stocks in the market and with improvement in the macro economy, of cause, liquidity situation in the economy will improve, which will trickle down to the market, I think essentially those are the major factors we will be looking at from the macro economy and specifically from the banking industry that will drive the market.
“The stock market is a very large institution and very delicate and it has a very well established regulatory framework which both the regulators and the operators know. The coming in of the new SEC Director General, I think is a good and welcome development.”
“I believe more vigor will be brought into regulating the market, but, because most of us are not very much familiar with her, it is a bit difficult for us to predict or anticipate how she will discharge her duties as the person heading the apex regulator of the market but what I will say is, I will expect her to be very diligent in the enforcement of the rules and regulation that guides operations in the market
Mr. Boniface Okezie, Chairman of Progressive Shareholders Association of Nigeria (PSAN) said, “The capital market needs a regulator who must be courageous to initiate policies that will bring growth and development of the market. The agency under her must handle the issue of market regulation and enforcement very strongly. We would like the SEC and NSE to be very proactive in 2010.
Policies and rules that will restore confidence to the market are highly needed. This is time for the NSE to wake up from its slumber and be able to police the market as expected to avoid manipulation and insider dealings among brokers.”