ASHON STUDIES COMMUNIQUE FOR ENDORSEMENT

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ASHON STUDIES COMMUNIQUE FOR ENDORSEMENT
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COMMUNIQUE OF THE 2019 ANNUAL CAPITAL MARKET SUMMIT AND AWARD NIGHT OF THE ASSOCIATION OF SECURITIES DEALING HOUSES OF NIGERIA (ASHON) HELD AT FEDERAL PALACE HOTEL, LAGOS ON FRIDAY, MARCH 29, 2019.

INTRODUCTION: As a registered trade group by the Securities and Exchange Commission (SEC), the Association of Securities Dealing Houses of Nigeria (ASHON), has always leveraged its annual Capital Market Summit to address topical issues, aimed at enhancing the growth and development of the Capital Market in particular and financial market in general.

This year’s summit, with the theme, “Financial Inclusion – The Capital Market Perspective” was designed to articulate the strategy and tactics of attracting more participants into the Nigerian Capital Market. The theme is consistent with the federal government’s policy of National Financial Inclusion Strategy, being midwifed by the Central
Bank of Nigeria (CBN).

ASHON’s Chairman, Chief Patrick Ezeagu posited that as a proactive trade group, the Association had to change its corporate logo and name from Association of Stockbroking Houses of Nigeria to Association of Dealing Houses of Nigeria (ASHON) to reflect expanded professional functions of stockbrokers in the changing dynamics of capital market operations. ASHON presented awards to some deserving individuals and institutions that had made significant contributions towards the growth and development of the Capital Market.

The keynote address was presented by the former Minister of National Planning, Dr Shamsudden Usman. Dr Usman who challenged the stockbrokers to conduct a diagnostic review of the capital market which has not survived from the effects of market crash of 2007-2008 deployed metaphor of black box to identify some of the challenges inhibiting its recovery and the way forward. He noted that about 51 per cent of Nigerians had been financially excluded while only 3.3 million are participating in the Capital Market of which one million are equity shareholders, indicating that the market is largely dominated by foreign investors.

His paper was discussed by a six-man panel comprising the Vice Chairman, Capital Bancorp Plc, Mr Olutola Mobolurin, The Nigerian Stock Exchange’s Chief Executive Officer, Mr Oscar Onyema, Central Securities Clearing System (CSCS) Plc’s Managing Director and CEO, Mr Haruna Jalo-Waziri, NASD Plc’s Managing Director and CEO, Mr Bola Ajomale, Director General, Debt Management Office (DMO), Mrs Patience Oniha and former Chairman, Nigerian Economic Summit Group (NESG), Mr Bukar Kyari.

At the end of the Summit, participants agreed as follows;

• There is an urgent and compelling need for stockbrokers to review their business model by taking a cue from the Chinese Model, Pakistan initiative or Mexican model, each of which places premium on financial inclusion through creation of one-stop financial centers across the country, especially, the rural areas where there is high concentration of financially excluded people.

. ASHON should collaborate with other trade groups in the Capital Market to intensify advocacy role by engaging the government and capital market regulators on the need to encourage trading in securities through investor-friendly legislation such as tax incentives and creation of enabling trading environment for market operators.

. In view of the far-reaching policies enunciated in the 10-year Capital Market Master Plan ( 2015-2025) of the Securities and Exchange Commission ( SEC), ASHON and other major stakeholders in the implementation Committee of the Master Plan should conduct regular review of the Plan to accommodate dynamic changes in the market following disruptive power of technology and current trends in investor psychology.

. Creation of innovative, flexible and affordable products that can satisfy the needs of existing and potential investors and tradable on user-friendly technology will ultimately promote financial inclusion by attracting investors of different disposable income into the market.

. In order to create a niche market and ensure products uptake and mass adoption, Capital Market stakeholders should collaborate with the apex associations of financial services providers without further delay.

. ASHON’s initiative of floating the Lagos Commodities and Futures Exchange (LCFE) symbolizes corporate foresight for financial inclusion and strategic move to encourage portfolio diversification in Nigeria . The laudable effort should be backed by SEC by way of reduction of transaction cost and regulatory bottlenecks when it commences operations in the unfolding commodities ecosystem in Nigeria. As an advocacy group, ASHON and other stakeholders should engage the Ministry of Works, Power and Housing and National Assembly to ensure that government demonstrates its belief in the Capital Market by financing the Infrastructure deficit in the 2019 Capital Expenditure through fund raising from the market rather than sourcing local and foreign loans.

. Currently, no fewer than 35 million Nigerians are believed to be on the data base of BVN. The capital market regulators and operators should liaise with the Central Bank of Nigeria (CBN) on how to attract many of this financially excluded into the capital market.

• Management of taxation has remained an impediment to investment in the Capital Market. ASHON should engage the market regulators and the Chartered Institute of Taxation to abolish the minimum tax on capital base paid by the operators and request for renewal of exemption from Value Added Tax (VAT) before it expires this year.

• Transaction cost in Nigerian Capital Market is a disincentive to investment as it is relatively higher than its international peers. There should be a downward review of transaction and listing costs to attract more individuals and institutional investors into the Capital Market.

. Lack of financial literacy has excluded many investors from the market, hence, the federal government, capital market regulators and operators should develop a comprehensive financial literacy curriculum, targeted at women, youths and physically challenged while Information and Communications Technology (ICT), NIPOST and other Channels are used for grassroot development outreach.

• Despite its relevance towards sustaining financial inclusion, patronage of the Federal Government’s Savings Bond is still relatively low. Government should expand awareness programme on the benefits of investing in fixed income securities and allied products without further delay.

• Participants viewed with great concern, the abysmal low level of application for Initial Public Offering (IPO) and other instruments for capital injection and urged the government and Capital Market regulators to encourage Small and Medium Scale Enterprises companies (SMEs) and big companies in the telecommunications and Oil and Gas to seek quotation on the securities market through fiscal incentives such as tax holiday and patronage of their products and services.

• As The Nigerian Stock Exchange has launched Mutual Fund Trading Platform to stimulate trading in the collective investment scheme alongside the Exchange Traded Funds (ETFs), participants urged The Exchange to intensify its public investor education programme on the benefits of these asset classes as a strategy for achieving financial inclusion through the market.

• Leveraging unique identity of investors can address the issue of financial inclusion, therefore, government should create a central database needed to centralize the National Identity Number (NIN) by utilizing the ID Ecosystem through collaboration with the World Bank
to mitigate its challenge.

• There is a need for all stakeholders to
strengthen mass awareness of the capital market products, especially, the benefits of Islamic and other non- Interest financial products such as Sukuk to promote seamless financial inclusion.

• The Capital Market is a barometer for the economy. The International Monetary Fund (IMF) has painted gloomy outlook for the global economy, cutting its forecast twice within this year. In Nigeria, Government should ensure accommodative fiscal and monetary policies to revive the ailing economy, renew investor confidence and put the economy on strong footing.

COMMUNIQUE OF THE 2019 ANNUAL CAPITAL MARKET SUMMIT AND AWARD NIGHT OF THE ASSOCIATION OF SECURITIES DEALING HOUSES OF NIGERIA (ASHON) HELD AT FEDERAL PALACE HOTEL, LAGOS ON FRIDAY, MARCH 29, 2019.

INTRODUCTION: As a registered trade group by the Securities and Exchange Commission (SEC), the Association of Securities Dealing Houses of Nigeria (ASHON), has always leveraged its annual Capital Market Summit to address topical issues, aimed at enhancing the growth and development of the Capital Market in particular and financial market in general.

This year’s summit, with the theme, “Financial Inclusion – The Capital Market Perspective” was designed to articulate the strategy and tactics of attracting more participants into the Nigerian Capital Market. The theme is consistent with the federal government’s policy of National Financial Inclusion Strategy, being midwifed by the Central
Bank of Nigeria (CBN).

ASHON’s Chairman, Chief Patrick Ezeagu posited that as a proactive trade group, the Association had to change its corporate logo and name from Association of Stockbroking Houses of Nigeria to Association of Dealing Houses of Nigeria (ASHON) to reflect expanded professional functions of stockbrokers in the changing dynamics of capital market operations. ASHON presented awards to some deserving individuals and institutions that had made significant contributions towards the growth and development of the Capital Market.

The keynote address was presented by the former Minister of National Planning, Dr Shamsudden Usman. Dr Usman who challenged the stockbrokers to conduct a diagnostic review of the capital market which has not survived from the effects of market crash of 2007-2008 deployed metaphor of black box to identify some of the challenges inhibiting its recovery and the way forward. He noted that about 51 per cent of Nigerians had been financially excluded while only 3.3 million are participating in the Capital Market of which one million are equity shareholders, indicating that the market is largely dominated by foreign investors.

His paper was discussed by a six-man panel comprising the Vice Chairman, Capital Bancorp Plc, Mr Olutola Mobolurin, The Nigerian Stock Exchange’s Chief Executive Officer, Mr Oscar Onyema, Central Securities Clearing System (CSCS) Plc’s Managing Director and CEO, Mr Haruna Jalo-Waziri, NASD Plc’s Managing Director and CEO, Mr Bola Ajomale, Director General, Debt Management Office (DMO), Mrs Patience Oniha and former Chairman, Nigerian Economic Summit Group (NESG), Mr Bukar Kyari.

At the end of the Summit, participants agreed as follows;

• There is an urgent and compelling need for stockbrokers to review their business model by taking a cue from the Chinese Model, Pakistan initiative or Mexican model, each of which places premium on financial inclusion through creation of one-stop financial centers across the country, especially, the rural areas where there is high concentration of financially excluded people.

. ASHON should collaborate with other trade groups in the Capital Market to intensify advocacy role by engaging the government and capital market regulators on the need to encourage trading in securities through investor-friendly legislation such as tax incentives and creation of enabling trading environment for market operators.

. In view of the far-reaching policies enunciated in the 10-year Capital Market Master Plan ( 2015-2025) of the Securities and Exchange Commission ( SEC), ASHON and other major stakeholders in the implementation Committee of the Master Plan should conduct regular review of the Plan to accommodate dynamic changes in the market following disruptive power of technology and current trends in investor psychology.

. Creation of innovative, flexible and affordable products that can satisfy the needs of existing and potential investors and tradable on user-friendly technology will ultimately promote financial inclusion by attracting investors of different disposable income into the market.

. In order to create a niche market and ensure products uptake and mass adoption, Capital Market stakeholders should collaborate with the apex associations of financial services providers without further delay.

. ASHON’s initiative of floating the Lagos Commodities and Futures Exchange (LCFE) symbolizes corporate foresight for financial inclusion and strategic move to encourage portfolio diversification in Nigeria . The laudable effort should be backed by SEC by way of reduction of transaction cost and regulatory bottlenecks when it commences operations in the unfolding commodities ecosystem in Nigeria. As an advocacy group, ASHON and other stakeholders should engage the Ministry of Works, Power and Housing and National Assembly to ensure that government demonstrates its belief in the Capital Market by financing the Infrastructure deficit in the 2019 Capital Expenditure through fund raising from the market rather than sourcing local and foreign loans.

. Currently, no fewer than 35 million Nigerians are believed to be on the data base of BVN. The capital market regulators and operators should liaise with the Central Bank of Nigeria (CBN) on how to attract many of this financially excluded into the capital market.

• Management of taxation has remained an impediment to investment in the Capital Market. ASHON should engage the market regulators and the Chartered Institute of Taxation to abolish the minimum tax on capital base paid by the operators and request for renewal of exemption from Value Added Tax (VAT) before it expires this year.

• Transaction cost in Nigerian Capital Market is a disincentive to investment as it is relatively higher than its international peers. There should be a downward review of transaction and listing costs to attract more individuals and institutional investors into the Capital Market.

. Lack of financial literacy has excluded many investors from the market, hence, the federal government, capital market regulators and operators should develop a comprehensive financial literacy curriculum, targeted at women, youths and physically challenged while Information and Communications Technology (ICT), NIPOST and other Channels are used for grassroot development outreach.

• Despite its relevance towards sustaining financial inclusion, patronage of the Federal Government’s Savings Bond is still relatively low. Government should expand awareness programme on the benefits of investing in fixed income securities and allied products without further delay.

• Participants viewed with great concern, the abysmal low level of application for Initial Public Offering (IPO) and other instruments for capital injection and urged the government and Capital Market regulators to encourage Small and Medium Scale Enterprises companies (SMEs) and big companies in the telecommunications and Oil and Gas to seek quotation on the securities market through fiscal incentives such as tax holiday and patronage of their products and services.

• As The Nigerian Stock Exchange has launched Mutual Fund Trading Platform to stimulate trading in the collective investment scheme alongside the Exchange Traded Funds (ETFs), participants urged The Exchange to intensify its public investor education programme on the benefits of these asset classes as a strategy for achieving financial inclusion through the market.

• Leveraging unique identity of investors can address the issue of financial inclusion, therefore, government should create a central database needed to centralize the National Identity Number (NIN) by utilizing the ID Ecosystem through collaboration with the World Bank
to mitigate its challenge.

• There is a need for all stakeholders to
strengthen mass awareness of the capital market products, especially, the benefits of Islamic and other non- Interest financial products such as Sukuk to promote seamless financial inclusion.

• The Capital Market is a barometer for the economy. The International Monetary Fund (IMF) has painted gloomy outlook for the global economy, cutting its forecast twice within this year. In Nigeria, Government should ensure accommodative fiscal and monetary policies to revive the ailing economy, renew investor confidence and put the economy on strong footing.

COMMUNIQUE OF THE 2019 ANNUAL CAPITAL MARKET SUMMIT AND AWARD NIGHT OF THE ASSOCIATION OF SECURITIES DEALING HOUSES OF NIGERIA (ASHON) HELD AT FEDERAL PALACE HOTEL, LAGOS ON FRIDAY, MARCH 29, 2019.

INTRODUCTION: As a registered trade group by the Securities and Exchange Commission (SEC), the Association of Securities Dealing Houses of Nigeria (ASHON), has always leveraged its annual Capital Market Summit to address topical issues, aimed at enhancing the growth and development of the Capital Market in particular and financial market in general.

This year’s summit, with the theme, “Financial Inclusion – The Capital Market Perspective” was designed to articulate the strategy and tactics of attracting more participants into the Nigerian Capital Market. The theme is consistent with the federal government’s policy of National Financial Inclusion Strategy, being midwifed by the Central
Bank of Nigeria (CBN).

ASHON’s Chairman, Chief Patrick Ezeagu posited that as a proactive trade group, the Association had to change its corporate logo and name from Association of Stockbroking Houses of Nigeria to Association of Dealing Houses of Nigeria (ASHON) to reflect expanded professional functions of stockbrokers in the changing dynamics of capital market operations. ASHON presented awards to some deserving individuals and institutions that had made significant contributions towards the growth and development of the Capital Market.

The keynote address was presented by the former Minister of National Planning, Dr Shamsudden Usman. Dr Usman who challenged the stockbrokers to conduct a diagnostic review of the capital market which has not survived from the effects of market crash of 2007-2008 deployed metaphor of black box to identify some of the challenges inhibiting its recovery and the way forward. He noted that about 51 per cent of Nigerians had been financially excluded while only 3.3 million are participating in the Capital Market of which one million are equity shareholders, indicating that the market is largely dominated by foreign investors.

His paper was discussed by a six-man panel comprising the Vice Chairman, Capital Bancorp Plc, Mr Olutola Mobolurin, The Nigerian Stock Exchange’s Chief Executive Officer, Mr Oscar Onyema, Central Securities Clearing System (CSCS) Plc’s Managing Director and CEO, Mr Haruna Jalo-Waziri, NASD Plc’s Managing Director and CEO, Mr Bola Ajomale, Director General, Debt Management Office (DMO), Mrs Patience Oniha and former Chairman, Nigerian Economic Summit Group (NESG), Mr Bukar Kyari.

At the end of the Summit, participants agreed as follows;

• There is an urgent and compelling need for stockbrokers to review their business model by taking a cue from the Chinese Model, Pakistan initiative or Mexican model, each of which places premium on financial inclusion through creation of one-stop financial centers across the country, especially, the rural areas where there is high concentration of financially excluded people.

. ASHON should collaborate with other trade groups in the Capital Market to intensify advocacy role by engaging the government and capital market regulators on the need to encourage trading in securities through investor-friendly legislation such as tax incentives and creation of enabling trading environment for market operators.

. In view of the far-reaching policies enunciated in the 10-year Capital Market Master Plan ( 2015-2025) of the Securities and Exchange Commission ( SEC), ASHON and other major stakeholders in the implementation Committee of the Master Plan should conduct regular review of the Plan to accommodate dynamic changes in the market following disruptive power of technology and current trends in investor psychology.

. Creation of innovative, flexible and affordable products that can satisfy the needs of existing and potential investors and tradable on user-friendly technology will ultimately promote financial inclusion by attracting investors of different disposable income into the market.

. In order to create a niche market and ensure products uptake and mass adoption, Capital Market stakeholders should collaborate with the apex associations of financial services providers without further delay.

. ASHON’s initiative of floating the Lagos Commodities and Futures Exchange (LCFE) symbolizes corporate foresight for financial inclusion and strategic move to encourage portfolio diversification in Nigeria . The laudable effort should be backed by SEC by way of reduction of transaction cost and regulatory bottlenecks when it commences operations in the unfolding commodities ecosystem in Nigeria. As an advocacy group, ASHON and other stakeholders should engage the Ministry of Works, Power and Housing and National Assembly to ensure that government demonstrates its belief in the Capital Market by financing the Infrastructure deficit in the 2019 Capital Expenditure through fund raising from the market rather than sourcing local and foreign loans.

. Currently, no fewer than 35 million Nigerians are believed to be on the data base of BVN. The capital market regulators and operators should liaise with the Central Bank of Nigeria (CBN) on how to attract many of this financially excluded into the capital market.

• Management of taxation has remained an impediment to investment in the Capital Market. ASHON should engage the market regulators and the Chartered Institute of Taxation to abolish the minimum tax on capital base paid by the operators and request for renewal of exemption from Value Added Tax (VAT) before it expires this year.

• Transaction cost in Nigerian Capital Market is a disincentive to investment as it is relatively higher than its international peers. There should be a downward review of transaction and listing costs to attract more individuals and institutional investors into the Capital Market.

. Lack of financial literacy has excluded many investors from the market, hence, the federal government, capital market regulators and operators should develop a comprehensive financial literacy curriculum, targeted at women, youths and physically challenged while Information and Communications Technology (ICT), NIPOST and other Channels are used for grassroot development outreach.

• Despite its relevance towards sustaining financial inclusion, patronage of the Federal Government’s Savings Bond is still relatively low. Government should expand awareness programme on the benefits of investing in fixed income securities and allied products without further delay.

• Participants viewed with great concern, the abysmal low level of application for Initial Public Offering (IPO) and other instruments for capital injection and urged the government and Capital Market regulators to encourage Small and Medium Scale Enterprises companies (SMEs) and big companies in the telecommunications and Oil and Gas to seek quotation on the securities market through fiscal incentives such as tax holiday and patronage of their products and services.

• As The Nigerian Stock Exchange has launched Mutual Fund Trading Platform to stimulate trading in the collective investment scheme alongside the Exchange Traded Funds (ETFs), participants urged The Exchange to intensify its public investor education programme on the benefits of these asset classes as a strategy for achieving financial inclusion through the market.

• Leveraging unique identity of investors can address the issue of financial inclusion, therefore, government should create a central database needed to centralize the National Identity Number (NIN) by utilizing the ID Ecosystem through collaboration with the World Bank
to mitigate its challenge.

• There is a need for all stakeholders to
strengthen mass awareness of the capital market products, especially, the benefits of Islamic and other non- Interest financial products such as Sukuk to promote seamless financial inclusion.

• The Capital Market is a barometer for the economy. The International Monetary Fund (IMF) has painted gloomy outlook for the global economy, cutting its forecast twice within this year. In Nigeria, Government should ensure accommodative fiscal and monetary policies to revive the ailing economy, renew investor confidence and put the economy on strong footing.

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