Experts List Survival Strategies for Capital Market

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Financial market experts and capital market operators have proffered workable solutions to reposition the market for the benefits of all stakeholders.
They gave the recommendations at the 2019 Capital Market Summit hosted by the Association of Securities Dealing Houses of Nigeria (ASHON) in Lagos.

The keynote speaker/Chairman and CEO, Susman and Associates, Dr Shamsusdden Usman, in his paper titled, “Driving Financial Inclusion through the Capital Market,” explained that unlike other markets that had fully recovered from the global financial crises of 2007-2008, Nigeria’s capital market had continued to suffer from investor apathy and other sundry issues.

Usman, a former Minister of Finance and National Planning, advocated for a complete review of the market in line with the current realities in the global financial market in order to re-address the issue of investor confidence and leverage the market for financial inclusion. He advocated a one-stop financial centres in line with some foreign markets.

“In China, interbank bond markets offer special financial bonds for the purpose of increasing size of loans to the SMEs. Capital Market Business Hubs (CMBH) are established in small cities to expand outreach of capital market institutions. In Mexico, the farmer mutual insurance funds provide insurance to their members by pooling together resources to pay for future indemnities and reinsures itself from major systemic risks that could hurt simultaneously all their members,” Usman said.
He stated that he instituted a project called ‘Voice and Voting Power’(VPP) in which major stakeholders are involved with the aim of finding lasting solutions to the challenges facing the capital market.

Usman identified some of VPP’s recommendations as development of the commodities exchange ecosystem, encouraging more trading through tax incentives, deepening of Islamic Finance and other non-interest products, development of bond market, reduction of the average costs of issuing equity and debt securities, relaxation of complex legal, regulatory and listing requirements and greater use of simple and innovative technology among others.

Also speaking, ASHON’s Chairman, Chief Patrick Ezeagu, stated that the association had aligned with the policy thrust of the government that every citizen should participate in the financial industry and enjoy its benefits.

“The association has been engaging in various advocacy initiatives in line with our objectives. We recognise that the world is fast undergoing some evolution, especially in the way of doing things which is being propelled by the fast pace of technological innovations.
“The recognition of the retail investor and expansion of the scope of our business to the hinterlands are key to stimulation and sustainable growth of the capital market. We believe that we should work in tandem with all regulatory institutions to promote financial inclusion,” Ezeagu said.

According to him, ASHON decided to make a slight change in its nomenclature to Association of Securities Dealing Houses of Nigeria with a new logo as brand identity to reflect the expanded scope of the members’ operations.

He also noted that some eminent Nigerians presented awards were those recognised for outstanding contributions to the growth and development of the market.
The panellists who spoke on the perspective of the capital market on financial inclusion underscored the need for financial literacy for all categories of investors, strong advocacy for the market in the government institutions, introduction of simple and affordable market products and deployment of simple technologies.

The Securities and Exchange Commission (SEC) recently announced an extension of the deadline for the discontinuation of the issuance of dividend warrants to December 2019.

The move, according to the Commission, was to enable relevant stakeholders deliberate on and address all outstanding issues.
SEC announced the extension via circular on its website, saying the decision was also in furtherance of its mandate to ensure that all categories of shareholders and investors are adequately protected.
According to the Commission, the extension of the deadline for discontinuation of issuing of warrants does not stop investors to continue with the registration for electronic-dividend.