Stockbrokers on Wednesday voiced their concerns over the dominance of the Nigerian stock market by foreign investors, saying this would hardly promote the interest of the country’s economy.
The Governing Council of the Chartered Institute of Stockbrokers, CIS, said more than 60 per cent of the players in the Stock market were currently foreigners.
President and Chairman of the Institute, Albert Okumagba, told the new acting director general, Securities and Exchange Commission, SEC, Mounir Gwarzo, in Abuja that the development was totally unacceptable, as it amounted to leaving the country’s economy in the hands of foreigners.
“The level of participation of Nigerians in the stock market is effectively less than three million, when ideally over 80 million of our people should be in the market,” Mr. Okumagba said.
“Our coverage of insurance assets in Nigeria is not up to two percent of insurable assets. If we can increase from two to 20 percent, and then to 50 percent, we will be shocked at the kind of contribution the insurance sector would make to the economy,” he added.
According to Mr. Okumagba, a situation where the coverage of the country’s pension was only about 8 percent was poor, noting that if more Nigerians were captured by the Pension Reform Act, the country would be able to mobilise more than the N4.7billion currently.
He cited the sector as one with huge opportunities Nigerian investors and pension companies have staked over $25 billion, pointing out that though there was room to invest about 25 percent, only about 12 percent has been taken up.
The Institute, he stated, was confident that some of the factors holding down the market today, including insecurity, elections and falling crude oil prices, would soon ease off, for the market to stabilize and grow.
The Ag. Director General of SEC, in his response, assured Nigerian investors that the capital market regulator would continue to ensure that the market remained vibrant, to attract investors, both locally and internationally.
Mr. Gwarzo said the current management under his leadership would strive to develop domestic investment opportunities from retail and institutional investors to boost the country’s economic growth
“We will step up to reach out to the market and improve investment,” Mr. Gwarzo said. “On the international side, what is most important is the enabling environment.
At the moment, he said, the rules in the market were very friendly, pointing out that the Commission would continue to change them from regularly to suit best practices and attract more investors.
The acting DG, emphasized the need for investors’ education both for retail and institutional services, saying this would help improve the level of investment from Nigerians.
Dering the meeting, both parties shared ideas on issues that would engender better interface between the regulators and the operators.
At the end, both parties expressed the desire for the capital market to play a deeper role in funding gaps in the federal budget as well as to mobilize institutional funding for infrastructure development.
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