Nigerian government pledges to address concerns of retail stock market investors

The Federal Government has empathised with Nigerian shareholders over the situation of their portfolio investments.

Nigerian investors had over the years raised concerns about government’s nonchalant attitude to their huge losses following regulatory induced policy and inconsistent fiscal economic blueprints.

Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria, ISAN, said that apathy among domestic investors stemmed from repeated nonchalant attitude of government to the suffering of more than six million active Nigerian retail investors.

Mr. Nwosu accused government of treating shareholders with disdain in spite of their contributions towards sustained local wealth creation and economic development.

But Mounir Gwarzo, the Director General of the Securities and Exchange Commission, SEC, said that government through the capital market regulator was serious in addressing the issues raised by retail investors.

Speaking at a workshop organized by the Capital Market Correspondent Association of Nigeria, CAMCAN, in Lagos on Saturday, Mr. Gwarzo said, “We want to address concerns of retail investors before we start wooing them into the market.”

According to him, the commission has inaugurated the board of Investors Protection Fund (IPF) and from next year, proceeds of shares sale will be paid directly into the account of investors as part of efforts to address investors concerns.

Mr. Gwarzo, explained that dematerialisation of shares is very important to the growth of the market, adding that by 2016 more shares would be dematerialised.

Dematerialisation is the process through which an investor’s physical share certificate gets converted to electronic format which is maintained in an account with the Depository.

Also speaking, Oscar Onyema, the Chief Executive Officer of the Nigerian Stock Exchange, NSE, who spoke on the workshop theme, “Effective Reporting of Changes in the Nigerian capital market,” said
retail investors need to be educated on why they should take portfolio approach to investment.

“It is important to do the analysis, understand where those opportunities are but certainly there are opportunities, not only in the equity side but across the various asset classes.

“We always advise investors to diversify their portfolios across different assets classes to mitigate risks.”

Mr. Onyema said that good corporate governance will ensure the existence of solid companies in Nigeria. He also argued that forcing companies to list on the nation’s bourse may lead to infractions in the market, adding that a lot of energy has been committed in building the foundational aspect of the market in terms of transparency, orderliness, fairness, disclosure, and enforcement of rules and regulations.

“In the short term, you will see the huge volatility but that should not distract from those fundamental elements about good companies, making good money, running under a well governed Exchange structure and a well regulated market structure.

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“These factors will combine to shore up investors’ confidence in these challenging times.
“As we continue to work towards achieving and sustaining this market, the importance of your role cannot be over emphasized.

“Financial journalists have the potential to influence investors’ behaviour. Negative reporting may result in sensationalism and put additional pressures that can force investors’ decisions negatively,”
he added.

Earlier, Goddy Egene, the President of CAMCAN, commended the regulators for attending the workshop, saying that in the last two years, a lot of changes have occurred in the market and there is need for cooperation of stakeholders for the progress of the market.

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