By Peter Egwuatu, who was in Kenya
LAGOSâ€”THE Securities and Exchange Commission, SEC, has put to rest the controversial issue of recapitalisation of capital market operations saying it was absolutely necessary and a must for all issuing houses, stock broking firms and registrars to further boost investorsâ€™confidence.
Director General of SEC, Ms. Arunma Oteh who is on a working visit to Uganda and Kenya told Vanguard, weekend, during her courtesy visit to the Capital Market Authority of Kenya and the Nairobi Stock Exchange, NSE.
After observing trends in some of the East Africa capital markets, she said: â€œIt is absolutely necessary for operators in the capital market to recapitalise given the increase in the volume of transactions they handle. The Commission certainly will revisit the recapitalisation of market operators but we are not going to increase the capital base of these operators with the same level like their counterpart in the banking industry given their peculiar operations. But certainly we are going to undertake the recapitalization exercise in the market.â€
It will be recalled that when the issue of recapitalisation of capital market operations came up late last year, some operators in the Nigerian capital market argued that there was no need to recapitalise their operations given the fact that they only executed clientsâ€™ mandate.
Some of the stockbroking firms had said that they did not need further capital since they were involved in a cash and carry business.
But Ms Oteh, who was at the Capital Market Authority, CMC, Kenya on a fact finding mission of the demutualization process in Nairobi Stock Exchange further said, â€œI am really impressed about the demutualization process going on in the Nairobi Stock Exchange. This is the main thing around the globe and the East Africans and Africa as a whole must embrace it.
â€œIn our own Nigerian Stock Exchange, NSE, the process began two years ago but was stopped due to some problems. We at SEC will play our role as regulator to ensure that the process is as transparent as possible so that all stakeholders are carried along.â€