Our expectations for the capital market in 2011, Operators and stakeholders
» Our expectations for the capital market in 2011, Operators and stakeholders
Capital market operators and stakeholders are canvassing for policies that will improve investors ’confidence that is gradually returning to the market in 2011.
The operators and stakeholders stressed that for the market to attract investors, the regulatory authorities must ensure that policies and regulations capable of lifting the market are implemented in the year 2011.
Excerpts:
Dr. David Ogogo, Registrar/Chief Executive, Institutes of Capital Market Registrars(ICMR)
We expect that the regulatory authorities will encourage more companies to list on the Nigerian Stock Exchange (NSE) and if this is done there will be increase in companies coming to raise money in the market to boost their operations.
In 2011, it is expected that prices of stock will continue their crawl upwards. The secondary market will experience increase in activities. The market will become stable before the end of 2011 as the effect of Assets Management Company of Nigeria (AMCON) will begin to be felt.
Dr. Faruk Umar, Chairman, Advancement for the Rights of Nigerian Shareholders. Corporate governance should be strictly pursued by the regulatory bodies in the capital market. The market would be better in 2011 than the previous year. Assets Management Company of Nigeria (AMCON) is going to really impact on the market when it starts implementing its role.
Also, it is expected that the Central Bank of Nigeria (CBN) will conclude the core investors’ stake in the rescued banks.
If the CBN is able to conclude the sale of the troubled banks by first or second quarter of 2011, it will help restore confidence to the market as investors will begin to take interest in banking stocks once the ownership and management issues of these affected banks are resolved.
Another thing that would boost confidence in the market is the forth coming general election in the country. If the election is free and fair, it will help boost the market as both foreign and local investors would be enticed to invest in the country. The political climate of the country in 2011 will go a long way in determining the shape of the capital market and the economy in general.
I am appealing to the politicians to ensure that they abide by the rules of the game. They should ensure that there is stable democracy through a free and fair election because stable democracy will attract investors to the market.
Sir Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria
If the regulators in the market are able to put their art together then we expect confidence to bounce back. We expect our regulators to really look at issues objectively without taking side. But if the regulators work in a way that is different from the rules then confidence will continue to elude the market. We want the regulators to ensure that their actions are transparent.
It is also our belief that AMCON will impact on the market when it effectively implement its policies. But the issue with AMCON that has not been addressed is: Will AMCON has a voting right when it acquires the bad loans and shares of these banks? So this is one of the things that must be addressed so that we as shareholders will know our fate with our companies.
Chief Aderemi Oyepeju, Chairman, Ibadan Zonal Shareholders Association of Nigeria
I expect the regulatory authorities to ensure strict compliance of rules by the operators. The regulator s should uphold the recent reforms in the market and ensure that any operator found flouting the rules is dealt with in accordance with the law.
The regulators in the financial sector should not relax in their responsibilities to the market. There should be fairness and transparency in the market. Those who bend the rules of the market should be punished accordingly so that it will serve as deterrent to others. Operators should be made to comply with the rules of the market. There should be no sentiment.
We the shareholders also advise the SEC to ensure that a substantive Director General (for the NSE) emerge this year. When the new DG emerges we expect him to carry along all stakeholders in the market. The whistle blowing should be upheld. The shareholders are really the major whistle blower in the market so when they are carried along they would be able to give out information that would help grow the market.
Also, we appeal that the CBN should extend the December deadline for banks to comply to the end of year financial report to August 2011 in order to accommodate the rescued banks.
Chief Kingsley Ikpe, Group Managing Director/CEO, Thomas Kingsley Securities The market has suffered a lot as a result of management ineptitude of the NSE. The crash of the market attributed to global meltdown was just a mere excuse. If the then management was well focused and articulated they would have averted the situation.
However, we thank God for having a new leadership in the Securities and Exchange Commission (SEC) in person of Arunma Oteh who has both local and international experience in the financial sector.
The current reform in the capital market is a welcome development. This is the first time that the SEC is asserting authority in the capital market. Before now many people thought the NSE is a government run institution. This is because of the name and how the institution portrays itself in issues affecting the capital market. The SEC has not really been exercising its authority in the capital. SEC is supposed to be the apex regulator even though the NSE came before it.
Well, we hope that the current DG of the SEC will come up with good reforms that will be able to change the face of the market.
The leadership crisis in the NSE should be resolved without delay.
The SEC should ensure that a credible candidate for the Director General of the NSE and other directorate positions emerge. It is only when we have credible and competent people in the management of the NSE that we shall begin to see changes and confidence returning to the marker since NSE is the only secondary market for securities transactions in the country.
The other things expected of SEC include: turning out rules that will impact on the market, incentives that will attract investors to the market, amongst others.
Mr. Chineyem Anyanwu, Managing Director, Dependable Securities Limited
If you look at the brightness of things as we can see now in the market it is a fact that AMCON will impact on the market when full operations begins.
By 2011 full operation will start since is it is the major tool to stimulate the economy by mopping up the toxic asset of banks, incurred during the meltdown, and they will have money to lend.
The major problem of banks is lack of credit creation, banks can not muster enough credit, and the economy will pick up if banks can create credit and lend money.
2011 election is coming, we should be praying for the success of the election because the world is watching Nigeria, if we get it right this time it will boost the economy, foreign investors will have confidence in Nigeria and will not be afraid to channel resources to Nigeria.
We expect that the new DG of the NSE who should assume office early this year to come with his own idea that would move the capital market forward.
If the person that we are hearing is officially announced, I believe his wealth of experience gathered in America and particularly his stint at American Exchange (ANNEX) will help to restructure the stock exchange.
The restructuring that is needed most is the area of creating debt market. It is a known fact that the major problem the NSE had was the divestment of the foreign investors from our market
I believe we can also do some derivatives and we need to deepen the market. We expect that Federal Government of Nigeria to work with the SEC and NSE to put down certain conditions that will persuade/compel some mega organisations like MTN, Econet, Globacom, Etisalat, to name but a few in the communication sector and oil sector to get listed on the stock exchange in order to return benefit taken from the land to the citizens.
Lately, not much have been seen from Bureau of Public Enterprises( BPE) and its privatization efforts, we expect government to speed up effort of privatising the government‘s owned organisation slated for privatisation, that I believe is okay to give tonic to the ailing economy and deepen the market.
In all I believe 2011 will be better than 2010 based on the fact that the rest of the world is recovering and we cannot be the one left in the restructuring exercise.
David Andorin, General Manager, Lambeth Securities
Very bright, highly positive, the first quarter of 2011 will be better than the first quarter of 2010. The primary mission of the capital market is to finance business.
With the seriousness of current administration to privatise the economy, the transparency in the privatisation of the public entity will deepen stock market, increase market capitalisation
AMCOM will also impact the market because its intervention will make banks profitable. The banking industry is the ground on which the economy evolves, if banks are rehabilitated the trickle down on the economy will be enormous.
Government role in free market is to render socio-political services; it is advisable that government should privatise entities that will help grow the economy, such as Power, Energy and Steel.
Capital market operators and stakeholders are canvassing for policies that will improve investors ’confidence that is gradually returning to the market in 2011.
Ote
Excerpts:
Dr. David Ogogo, Registrar/Chief Executive, Institutes of Capital Market Registrars(ICMR)
We expect that the regulatory authorities will encourage more companies to list on the Nigerian Stock Exchange (NSE) and if this is done there will be increase in companies coming to raise money in the market to boost their operations.
In 2011, it is expected that prices of stock will continue their crawl upwards. The secondary market will experience increase in activities. The market will become stable before the end of 2011 as the effect of Assets Management Company of Nigeria (AMCON) will begin to be felt.
Dr. Faruk Umar, Chairman, Advancement for the Rights of Nigerian Shareholders. Corporate governance should be strictly pursued by the regulatory bodies in the capital market. The market would be better in 2011 than the previous year. Assets Management Company of Nigeria (AMCON) is going to really impact on the market when it starts implementing its role.
Also, it is expected that the Central Bank of Nigeria (CBN) will conclude the core investors’ stake in the rescued banks.
If the CBN is able to conclude the sale of the troubled banks by first or second quarter of 2011, it will help restore confidence to the market as investors will begin to take interest in banking stocks once the ownership and management issues of these affected banks are resolved.
Another thing that would boost confidence in the market is the forth coming general election in the country. If the election is free and fair, it will help boost the market as both foreign and local investors would be enticed to invest in the country. The political climate of the country in 2011 will go a long way in determining the shape of the capital market and the economy in general.
I am appealing to the politicians to ensure that they abide by the rules of the game. They should ensure that there is stable democracy through a free and fair election because stable democracy will attract investors to the market.
Sir Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria
If the regulators in the market are able to put their art together then we expect confidence to bounce back. We expect our regulators to really look at issues objectively without taking side. But if the regulators work in a way that is different from the rules then confidence will continue to elude the market. We want the regulators to ensure that their actions are transparent.
It is also our belief that AMCON will impact on the market when it effectively implement its policies. But the issue with AMCON that has not been addressed is: Will AMCON has a voting right when it acquires the bad loans and shares of these banks? So this is one of the things that must be addressed so that we as shareholders will know our fate with our companies.
Chief Aderemi Oyepeju, Chairman, Ibadan Zonal Shareholders Association of Nigeria
I expect the regulatory authorities to ensure strict compliance of rules by the operators. The regulator s should uphold the recent reforms in the market and ensure that any operator found flouting the rules is dealt with in accordance with the law.
The regulators in the financial sector should not relax in their responsibilities to the market. There should be fairness and transparency in the market. Those who bend the rules of the market should be punished accordingly so that it will serve as deterrent to others. Operators should be made to comply with the rules of the market. There should be no sentiment.
We the shareholders also advise the SEC to ensure that a substantive Director General (for the NSE) emerge this year. When the new DG emerges we expect him to carry along all stakeholders in the market. The whistle blowing should be upheld. The shareholders are really the major whistle blower in the market so when they are carried along they would be able to give out information that would help grow the market.
Also, we appeal that the CBN should extend the December deadline for banks to comply to the end of year financial report to August 2011 in order to accommodate the rescued banks.
Chief Kingsley Ikpe, Group Managing Director/CEO, Thomas Kingsley Securities The market has suffered a lot as a result of management ineptitude of the NSE. The crash of the market attributed to global meltdown was just a mere excuse. If the then management was well focused and articulated they would have averted the situation.
However, we thank God for having a new leadership in the Securities and Exchange Commission (SEC) in person of Arunma Oteh who has both local and international experience in the financial sector.
The current reform in the capital market is a welcome development. This is the first time that the SEC is asserting authority in the capital market. Before now many people thought the NSE is a government run institution. This is because of the name and how the institution portrays itself in issues affecting the capital market. The SEC has not really been exercising its authority in the capital. SEC is supposed to be the apex regulator even though the NSE came before it.
Well, we hope that the current DG of the SEC will come up with good reforms that will be able to change the face of the market.
The leadership crisis in the NSE should be resolved without delay.
The SEC should ensure that a credible candidate for the Director General of the NSE and other directorate positions emerge. It is only when we have credible and competent people in the management of the NSE that we shall begin to see changes and confidence returning to the marker since NSE is the only secondary market for securities transactions in the country.
The other things expected of SEC include: turning out rules that will impact on the market, incentives that will attract investors to the market, amongst others.
Mr. Chineyem Anyanwu, Managing Director, Dependable Securities Limited
If you look at the brightness of things as we can see now in the market it is a fact that AMCON will impact on the market when full operations begins.
By 2011 full operation will start since is it is the major tool to stimulate the economy by mopping up the toxic asset of banks, incurred during the meltdown, and they will have money to lend.
The major problem of banks is lack of credit creation, banks can not muster enough credit, and the economy will pick up if banks can create credit and lend money.
2011 election is coming, we should be praying for the success of the election because the world is watching Nigeria, if we get it right this time it will boost the economy, foreign investors will have confidence in Nigeria and will not be afraid to channel resources to Nigeria.
We expect that the new DG of the NSE who should assume office early this year to come with his own idea that would move the capital market forward.
If the person that we are hearing is officially announced, I believe his wealth of experience gathered in America and particularly his stint at American Exchange (ANNEX) will help to restructure the stock exchange.
The restructuring that is needed most is the area of creating debt market. It is a known fact that the major problem the NSE had was the divestment of the foreign investors from our market
I believe we can also do some derivatives and we need to deepen the market. We expect that Federal Government of Nigeria to work with the SEC and NSE to put down certain conditions that will persuade/compel some mega organisations like MTN, Econet, Globacom, Etisalat, to name but a few in the communication sector and oil sector to get listed on the stock exchange in order to return benefit taken from the land to the citizens.
Lately, not much have been seen from Bureau of Public Enterprises( BPE) and its privatization efforts, we expect government to speed up effort of privatising the government‘s owned organisation slated for privatisation, that I believe is okay to give tonic to the ailing economy and deepen the market.
In all I believe 2011 will be better than 2010 based on the fact that the rest of the world is recovering and we cannot be the one left in the restructuring exercise.
David Andorin, General Manager, Lambeth Securities
Very bright, highly positive, the first quarter of 2011 will be better than the first quarter of 2010. The primary mission of the capital market is to finance business.
With the seriousness of current administration to privatise the economy, the transparency in the privatisation of the public entity will deepen stock market, increase market capitalisation
AMCOM will also impact the market because its intervention will make banks profitable. The banking industry is the ground on which the economy evolves, if banks are rehabilitated the trickle down on the economy will be enormous.
Government role in free market is to render socio-political services; it is advisable that government should privatise entities that will help grow the economy, such as Power, Energy and Steel.
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