Concerned that foreign investors control about 80 per cent of investments at the Nigerian Stock Exchange (NSE), the Securities and Exchange Commission (SEC) said it has drawn up strategies that would attract local investors to invest more in shares on the Exchange.
The Director-General of SEC, Ms. Arunma Oteh, who stated this during an interview in Uyo, Akwa Ibom State recently, said the commission was concerned that foreign investors were investing more in the securities market due to the present penny nature of most listed equities while local investors chose to stay away.
According to Oteh, “What we will do early next year is to map out more clearly were plans to ensure that local investor base are able to take up the opportunity that the market that has declined provides. Because we don’t want a situation where it is the international investors who are picking up the equities at reasonable prices and both our local institutional and local retail investors are not able to. We have mapped out some very specific plans which we will further develop in January”.
It would be recalled that 80 per cent of investments at the equities market is owned by foreign investors, and whenever there is a pull out of fund due to crisis in the international market, the local bourse usually suffers value depletion.
Oteh noted that the commission would be leveraging more on the soon to be launched e-library in Uyo early next year.
“The e-library that they are going to have established by the end of January is that we will have an investment learning centre. This is something that the SEC, NSE, CIS have committed to working with the government of Akwa Ibom State to have that centre? set up immediately. Because we recognise that the electronic platform is such an important platform given our youthful population, what is happening in the world,” she said.
Further, on ways to grow the market in 2012, the SEC DG said the commission would address the new issuance, “whether it be fixed income or equities. Because we have had a decline in new issuance. In fact, this year we have had no new issuance except for rights issues by a number of companies. So we agreed that there has to be concerted effort to bring new issuance to the market. One piece of it is that we must make sure that the market is attractive enough for them to come to list. But the other aspect is that we must make sure that the Exchange is a reflection of the economy. And also we followed the discussion around the importance of having telecoms companies, upstream oil and gas, agro businesses to list on the Exchange, and ensure that the privatisation agenda of the government, particularly with reference to power sector allows us to have the privatised companies be listed on the Exchange.
“The third area that is important to us is infrastructure in the sense that we want to make it more efficient for foreign investors to invest in our market. So, we are committed to addressing all of those things that will ensure efficiency. One of those things is to ensure that our dematerialisation plan is really firmed up. Dematerialisation started a few years ago. In fact, the Capital Market Council put together a committee led by Mr. Emeka Madubuike, the Chairman of ASHON, and they have presented every report to SEC on how we can make sure we firm up the issues of dematerialisation”.