Pension Industry to Tap from Islamic Capital Market, Says SEC

Ndubuisi Francis in Abuja

The Director General of the Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, has disclosed that the non-interest (Islamic) capital market (NICM) would soon witness substantial investment from the pension industry.

Yuguda said that it would be a game-changer that would spur more issuances of NICM products by corporates and other categories of issuers.

He made this remark at a virtual seminar on “Investor Protection and Transparency in Islamic Capital Markets” that was organised by the Islamic Financial Services Board (IFSB) and the SEC.

He also stated that the level of activities in non-interest (Islamic) capital market currently being witnessed in Nigeria attests to the overwhelming acceptance of products offered in the market by the investing public.

Yuguda said that this underscored the need to enhance the commission’s investor protection mechanism in order to ensure transparency in the market.

He stated that non-interest capital market has a huge potential in Nigeria because of its prospects to attract large pool of untapped investor base to participate in the capital market and the existing investors who seek to diversify their portfolio.

Yuguda said the level of activity in non-interest (Islamic) capital market that is currently being witnessed in the country affirmed the overwhelming acceptance of such products by the investing public.

He stated that the market witnessed the entry of institutions offering Islamic capital market services/products as well as the issuances of the Federal Government of Nigeria (FGN) into the Sukuk market with latest issuance of FGN SUKUK that was oversubscribed by over 400 per cent.

The director general identified investor protection as the principal plank of regulation and transparency and a building block that enhances the growth of the capital market.

He observed that the knowledge gap that often exists between the market players and investors demand for more transparency, and the risks faced by investors require a reasonable level of protection by the regulator in order to build confidence and trust in the market.

Yuguda noted that capital markets all over the world thrived on trust and said that the enhancement of investor protection and increased transparency would have a multiplier effect on investments and sustainable growth of the economy.