BY PROVIDENCE OBUH
Stock market analysts  have expressed divergent views on plans by the Securities and Exchange Commission (SEC) to reduce the number of stock broking firms.

NAN reported that analysts expressed their views in separate interviews  in Lagos on Friday. While some said that the plan would make the stock broking firms stronger and more efficient, another said that the plan should be shelved for now.

Ms Arunma Oteh, Director-General of the SEC, had on Feb. 7, said that the regulatory agency was working towards reducing the number of stock broking firms from about 300 to a manageable number.

Mr. Obioha Ome, a stockbroker, said that the consolidation was inevitable, adding that SEC should also work towards reducing transaction costs in the market.

Ome said that the consolidation would further deepen and broaden the market into world-class that could stimulate investor-confidence.

“All these issues about recapitalisation by firms will be addressed if there is consolidation among operators.

“Some of the firms will pool their resources together to meet the recapitalisation target.
“SEC has realised that there have been complaints from investors about the unauthorised sales of their shares by stockbrokers,” he said.

Another broker, who pleaded anonymity, said that the suspension of some stock broking firms for inadequate capitalization was a good decision.

“I strongly advocate that stock firms should be classified into classes as was done in the banking sector.

“For the market to be more reliable and strong, it should be classified into three categories; local, regional and international firms,” he said.

He said that the stock broker firms were only representing investors’ interest, adding that all transactions were being done on behalf of investors and kept with the Central Securities Clearing System (CSCS).

Mr. George Okafor, Managing Director of Ideal Securities, however, said that the issue of consolidation of broking firms was not necessary for now.

He  said that SEC was trying to avoid the issues that needed to be addressed now and was focusing on issues that were less important.

Okafor said that the consolidation should not be the issue in the market for now.

“What the regulator needs to do is to find a lasting solution to the crisis rocking the market currently.

“We can see that the market has been recording steady decline in the last three weeks and this should bother them,” he said