Market deepening, diversification will engender growth — SEC
By Philemon Adedeji
The Securities and Exchange Commission (SEC) has expressed its determination to deepen and diversify the capital market in a bid to create more wealth for investors and Nigerians as well as stimulate economic growth.
This was stated by Director General of the SEC, Mr. Lamido Yuguda during an interview weekend.
He stated that when capital markets are developed, the entire engine of saving and investing and allocation of resources to the projects that have the highest expected returns is made easy.
“And if you do that effectively, you will see that you will create more jobs in the economy, you will create more revenue for the government and make life easier for all investors.
“When that happens, you then have a lot of interested parties that want to put in their money to help the market develop,” he said.
The SEC DG said in a bid to develop the market, the SEC saw the need to have a forum where the Commission could interface with issuers in a bid to discourage delisting.
“When issuers delist, they do because of certain issues. So we decided to engage Nigeria Employers Consultative Association, NECA and set up the securities Issuers Forum. This was done to sit and discuss the issues and find solutions to them.”
Yuguda said that the Commission is working hard to look at the various issues and ensure that the problem of delisting by companies is brought under check.
The SEC DG disclosed that the Commission has put in place various other incentives to encourage companies to list as listing provides enormous benefits to both the companies and investors.
“Listing enhances higher investor protection. This collaboration with NECA has been very fruitful and that has given confidence to many of the players. We have started getting interest from the big players.”
The SEC Boss stated that some strategic listings have happened in the market in recent times and the Commission is encouraging the diversification of the equity market by listing companies within Power generation, Telecommunications and foods.
According to him, “We have had some strategic listings like the IPO of MTN, BUA Foods etc and asset class creation or new products like Derivatives have further helped diversify the listings from the huge leaning on the financial sector (Banks and Insurance) several years back.
“The problem with this market is when the big players do not list. So we started getting interest from the big players like MTN. And they decided to come in a very imaginative way. They decided to do the offer electronically so that people having telephones could subscribe without having to go through an intermediary.”
He assured that the Commission would continue to collaborate with various market stakeholders to support impactful innovation in the capital market.
“For example, our keen support of the innovation by the Issuing House to the MTN IPO in 2022, Chapel Hill Advisory, further promoted the benefits of electronic-IPO (e-IPO) which made it possible for over 100,000 new accounts to be opened on the CSCS, most of which belong to youths and women- key subsets of our demography which is considered critical to sustainable growth.
“Information Technology and FinTech is fast becoming Nigeria’s new oil, and we continue to support the participation of FINTECHs in helping the Capital Market attract the youth, and to help ease onboarding and ‘democratise’ access to wealth management services,” he added.
