The forum which will have media men in attendance offers the SEC DG, her counterpart at the Nigerian Stock Exchange (NSE), Prof. Ndi Okereke-Onyiuke, market operators, registrars and issuing houses, and other stakeholders opportunity to thinker on the way forward.
Interestingly, the meeting is coming on the heels of just concluded World Economic Forum Annual Meeting 2010 in Davos, Switzerland, where economic experts unanimously agreed that to improve the state of world after global meltdown governments and institutions must rethink, redesign, and rebuild.
Beside rethinking development, the focal point is where would big money managers invest? Stock markets are wobbly again. Global economic prospects are uncertain. And political climate of most emerging economies unpredictable. To domesticate these nagging issues, we may ask: Can foreign investors gamble their funds in our financial markets in spite current state of the economy?
Crash of Nigerian capital market which was attributed to massive funds outflow at the wake of the global financial crisis and the banking sector crisis have proved that our economy is not insular as it was wrongly thought; and for the economy to do well it must draw strength from foreign direct investments.
In view of the lack of full disclosure in the market, NSE status as private sector business (as opposed to a demutualised stock exchange) with all its imperfections, is the market the best place to invest among other emerging markets as alternative?
With what has happened to many investors as sad lesson, investment decision may not so much be because it delivers good returns, but because the market is stable and relatively easy to turn investments back into cash. To this extent, NSE may clearly be on the sidelines, if not on a blacklist of investment destinations.
“Investment heatmap” of fund managers do not favour economies full of uncertainties. Though they may look for “dislocated” troubled emerging markets where it is easy to exit but that would only add to the woes of investors when they dump their equities which is why some stock markets are rethinking how to curb activities of short term players otherwise called speculators in the market place.
Are the regulators, operators and other key stakeholders of the market rethinking, redesigning and working out any strategies of rebuilding Nigerian capital market to guarantee minimal risk of losses after market crash blamed on global financial meltdown (rightly or wrongly)? For a capital market that degenerated from yielding enviable returns to investors to delivering huge losses certainly there is need to take crucial steps to fix whatever identifiable problems holding it down. For stakeholders the most important challenge before the new DG is restoring investor confidence. They drew her attention to the factors that led to loss of confidence in the market.
According to the president, Progressive Shareholders’ Association of Nigeria, Mr. Boniface Okezie, if the new DG must restore investor confidence in the market, then she must be seen to be working towards protecting investors’ funds, and in doing this she has to revisit some of the outstanding issues that have weakened investors’ confidence in the market but which the Exchange has failed to address. For instance, cases of questionable reconstruction of shares by quoted companies.
Okezie who accused the trio of SEC, CBN and NSE of failure to protect investor’s funds recalled that shareholders of former African Continental Bank (ACB), one of the merged banks that came to be known as Spring Bank Plc, were short-changed by Spring Bank. According to him if new SEC DG begins by addressing some of the outstanding knotty issues that led to avoidable loss of funds by investors on the market, certainly such move will rekindle lost confidence and make investors to rush back to the market.
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