By  NKIRUKA NNOROM

Stakeholders in the capital market have suggested various measures that would be adopted by the regulators of the Nigerian Stock Exchange, NSE, and the federal government alike to ensure full recovery of the capital market from the current downturn.

Part of their suggestions include privatization and listing of state-owned enterprises, redefining the pension administration fund act to encourage more investment by PFAs in the capital market and wooing back domestic retail investors who have taken a flight to safety among other things.

Speaking on the development, the Chief Executive Officer of UBA Capital Plc, Mrs. Oluwatosin Sanni, called on the Federal Government to ensure privatization of state-owned enterprises and subsequent listing on the Nigerian Stock Exchange, NSE, saying that it would help to ingrain the recovery so far achieved.

Besides, she said that strong incentive like tax breaks should be offered telcos and other big firms to promote their listing on the NSE.

She further stated that attention should be paid to Pension Fund Administrators’ investment, adding that the guidelines must be updated to ensure full utilizations of the capital market.

Key industry reforms, according to her, should be continued, while friendly policies and initiatives should be introduced to encourage listing by small and medium enterprises

Citing example of actions taken by the United States of America to foster her capital market recovery after the 2008 global meltdown, Sanni said that the US Federal Reserve began a bond buying programme known as Quantitative Easing “QE” and capital injection into critical institutions.

“At the time, it was an unconventional policy that resulted in the reduction of interest rates and the provision of capital to financial institutions. This has helped to spur growth and confidence in the stock market and economy as a whole. The US Fed effectively injected USD 2.5 trillion into the market through debt purchases,” she stated.

According to her, there was also implementation of effective risk management systems and policies across all market operators.

“In 2013, the US SEC adopts new financial responsibility and reporting requirements for US registered brokers to ensure a more stable system with more transparent and well capitalized players – changes were made to net capital requirement, reporting standards & compliance,” she added.

Also speaking, Mr. Adebayo Adeleke, General Secretary, Independent Shareholders Association of Nigeria, ISAN, said over dependence on foreign investors as source of activity in the market should be curtailed, while seed providers should be sourced from within. “When you talk about deepening the market, the depth of it, most of it, you have a market where 70-80 percent is foreigners. It is dangerous. It is extremely dangerous. Is it because we don’t have money? That is not true! It is not true, because we also agree that we have not even penetrated the market deep enough.

“If we want to grow the market, we need to have a vision of ensuring that Nigerians are empowered in the goal of that particular market. We need to ensure that Nigerians are part and parcel of that development because what has happened before can happen again and probably, part of it is what we have been witnessing in the last two to three months in this market.

So, we had people in the time past because they had a burst in their economy, they pulled out and when they pulled out, we did not have enough internal capacity to sustain the bump that was going on. Now, we are happy to say that we are being followed by direct investment, our market is international and our 70 per cent of the investment is owned by foreigners.

“When it happens again, the crash of this will have such a monumental impact that we are likely to survive. So, there is need for regulators to begin to look for seed providers from within this country,” he said.

In his own opinion, Mr. Emeka Madubuike, Chairman, Association of Stockbroking Houses of Nigeria, ASHON, said recovery would be hampered if there is no conflict resolution mechanism in the market.He said that instead of a situation where the regulatory authorities try to change the entire system due to offense by some individuals, defaulters should be taken out of the system.

He said, “The regulators are akin to changing the rules, rather than change the rules because some people are breaching the rules, the culprits should be taken out of the system and allow the entire system to continue instead of crippling the entire system.”