The Association of Securities Dealing OF OF Houses of Nigeria (ASHON), a Trade Group registered by the Securities and Exchange Commission (SEC ) has always leveraged its annual Capital Market Summit to address topical issues aimed at enhancing the growth and development of the Nigerian Capital Market in particular and the financial markets in general.The Association of Securities Dealing OF OF Houses of Nigeria (ASHON), a Trade Group registered by the Securities and Exchange Commission (SEC ) has always leveraged its annual Capital Market Summit to address topical issues aimed at enhancing the growth and development of the Nigerian Capital Market in particular and the financial markets in general.
The Theme of its 2019 Summit – Financial Inclusion: The Capital Market Perspective – was designed to articulate the strategy of attracting more participants into the Capital Market segment of the Nigerian financial markets , pursuant to the Federal Government’s policy of National Financial Inclusion Strategy.
The tone of discussions was set by the Chairman, ASHON, Chief Patrick Ezeagu, who in his Welcome Address, stated that as a proactive trade group, the Association chose the theme to focus on the roles of policy makers and market participants in ensuring effective implementation of the Federal Government’s Financial Inclusion Strategy.
Dr Shamshudeen Usman, a former Minister of National Planning, who was The Key Note Speaker, provided clear perspectives to the theme of the Summit. He noted that 51% of Nigerians were financially excluded from the Capital Market, while 3.3 million of which only 1 million are equity holders, a clear indication that the market is largely dominated by foreign investors.
Commending the Association for identifying with the Federal Government’s efforts, aimed at addressing the challenges of financial inclusion, Dr Usman challenged the Association to conduct a diagnostic review of the market, which has not fully recovered from the effects of the 2008 financial market crisis. He urged ASHON to chart a new course that will not only lead to full recovery but attract more local participants in fulfillment of the current Federal Government policy thrust.
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 BukarKyari.
At the end of the Summit, participants resolved that:
1. There is an urgent and compelling need for the Securities Dealers to review their business models 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.
2. ASHON should collaborate with other trade groups in the Capital Market to intensify advocacy role by engaging the Government, Legislators 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.
3. There is a need for the Federal Government to take decisive steps to close the yawning gap between the Capital Market and the Money Markets which has continuously inhibited savings mobilization for long term capital investments in the country.
4. 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 saddled with the implementation of the Master Plan should conduct regular review of the Plan to accommodate dynamic changes in the market, especially, given the disruptive power of technology and current trends in investor psychology.
5. Market operators should embark on the creation of innovative, flexible and affordable products that can satisfy the needs of existing and potential investors and tradable on user-friendly technology to promote financial inclusion by attracting investors of different disposable income into the market.
6. In order to create a niche market and ensure products uptake and mass adoption, Capital Market stakeholders and apex associations of financial services providers should collaborate without further delay.
7. ASHON’s initiative of floating the Lagos Commodities and Futures Exchange (LCFE) symbolizes corporate foresight for financial inclusion and a strategic move to encourage portfolio diversification in Nigeria . This laudable effort should be supported by SEC by way of reduction of transaction cost and regulatory bottlenecks when it commences operations in the unfolding commodities ecosystem in Nigeria.
8. The Federal Government is once again called upon to take deliberate steps to finance its infrastructural development drive through the Capital Market rather than budgetary allocation as the Capital Market option has multiplier effects of cost effectiveness and enhancing market liquidity.
9. The SEC and the CBN should collaborate to bring the 35m currently in the BVN data base into the capital market as a first step towards broadening participation in the capital Market.
10. That the Federal Government should regard investments in the Capital Market as long term savings necessary to achieve a vibrant economic growth and encourage market participants by waiving the multitude of taxation currently imposed on transactions as they are disincentives to capital formation and moblilsation.
11. High Transaction cost in Nigerian Capital Market remains a major impediment 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.
12. 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.
13. The Federal Government is hereby called upon to pursue accommodative fiscal and monetary policies to revive the ailing economy, renew investor confidence and put the Capital Market on a strong pedestal.
Sam Onukwue, FCS,
2nd Vice Chairman