Commendation for the capital market

nigerian_stock_exchange

The recent surge of bad news in the Nigerian media space and the sad fuel scarcity has overshadowed the positive milestones in the country. A recent report from the popular international media platform CNN rated the Nigerian Stock Exchange (NSE) as one of the top five performing stock exchanges in the world. According to the report,the 43% rally of the Nigerian All-Share index helped to correct the losses the exchange had recorded in 2015 and 2016. In addition to this, capitalisation of the market hit N13 trillion in the year, being the highest in the last three years. The federal government also maximised the opportunities in the capital market to raise funds through the FGN Savings Bond, which was well subscribed. This performance of the capital market deserves commendation. Accolades must be showered on the suspended Director-General of the Securities and Exchange Commission (SEC), Dr. Muonir Gwarzo and the Chief Executive Officer of the Nigerian Stock Exchange (NSE),Oscar Onyema, for their leadership.

This achievement has shown that professionally run government organisations can deliver optimally when there is no undue interference. For the capital market to rise beyond the recession and the entire economic crisis that ravaged Nigerian in 2016 is enough to catch the world’s eye. The latest remark is a boost for the international image of the capital and capable of attracting foreign investors. Already, the reviews from the international scene have been positive from the moment CNN released the report. The Nigerian capital market has been regarded as one of the cheapest for investors with good returns on investment. Appreciably, a positive international branding of this nature requires conscious and deliberate efforts at nourishing it.

It is therefore imperative that the administrators of the capital market sustain the ongoing strategies to ensure the growth of the market. It is also incumbent on the government to insulate the market from the unnecessary entanglement of politics and undue interference from powers that be. For the market to continue in this giant stride requires regulatory tightness as we have seen under the leadership of Dr.MuonirGwarzo. Being an enduring institution it is now the responsibility of the Acting Director General, Dr. Abdul Zubairto continue in this drive to ensure that the market remains the pride of the country and the hope of all investors. Reuters reported during the suspension of MuonirGwarzo that being a veteran SEC staff member, he had proposed cutting fees on the market to boost activity among many other reforms. The report also added that his suspension may damage foreign investors’ confidence in a market that has seen no initial public offerings in more than a decade.Gwarzo was known to be a no-nonsense man with zero tolerance for breach of corporate governance. This disposition saw him sanctioning many chief executive officers of companies in the capital market, without any form of media attention. Perhaps the most popular attempt at upholding corporate governance in the capital market was the DG’s probe into Oando Nigeria Plc. Sadly, according to Gwarzo and reports in the media, it was his attempt to ensure sanity in the oil and gas company that led to his suspension by the Minister of Finance, KemiAdeosun. Although the Minister has denied any complicity in the allegation and has re-echoed that Oando surely has a case to answer, the probe by the House of Representatives into the circumstances surrounding the suspension is necessary to unravel the true situation for the integrity of the market.

On the positive side the prevailing situation also presents an opportunity for the Acting DG to uphold the integrity of the market and place in good stead for greater performance in the New Year. The most important task before the Securities and Exchange Commission (SEC) is to ensure that the impending forensic audit into Oando Nigeria Plc is carried out creditably even if it requires that the commission bears the cost. There is no need to remind the regulators that the world is watching how this poser is settled; and its outcome will surely impact the market either positively or otherwise. Investors want to put their funds in a market with a regulator strong enough to protect their investments.

The capital market is strategic to the economy of the nation. A healthy and booming capital market provides a good platform for companies to raise funds through public offers and right issues that will aid their expansion, and ultimately lead to job creation. The market can only experience growth when investors are confident in the regulator’s capacity to protect their investment and the companies’ capacity to provide positive returns on investment. The market is on already on the right path; we can build on it and guide against any encumbrance that may set off a setback. SEC must act rightly. 

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