By Peter Egwuatu
The Securities and Exchange Commission (SEC) in reaction to retail investors’ plight said that effective implementation of the capital market ten year master plan would go a long way to addressing major problems in the market. Director General of SEC Nigeria, Mounir Gwarzo said this in Abuja saying “A successful implementation of the 10 year master plan is necessary to attract retail investors to the market, address some of the challenges that Nigeria’s Capital market faced during the global capital market crash that occurred in 2008-2010 and also raise the standard of the market.
According to the DG “the market went down and a lot of investors lost money in this market and sometimes two years after, the Capital Market Committee (CMC) felt there was a need to come together and prepare a document that will be able to address some of these challenges “You also recall that in the 90s you had the Asian crisis where a lot of stock markets especially within the Asian countries went down and a few countries within the region, Asia and Malaysia prepared a very robust Master Plan.
Malaysia had a Master Plan from 2001 and they religiously implemented their Master Plan and after the completion of the Ten Year Master Plan the market was able to grow in terms of recapitalization of the Market, new products, more listings, quality of operators in the market. They were also able to address a lot of management issues at that time. He noted that since the new Management came on board, they decided to implement the plan that the entire market prepared and that is why every year the SEC comes up with some initiatives that the market can drive.
Gwarzo listed some of the recorded achievements in implementing the Master Plan to include Recapitalization, Direct Cash Settlement, E-Dividend, National Investors Protection Fund (NIPF), and Corporate Governance Scorecard among others. He emphasized that the only way to attract retail investors back to the market is to ensure that concrete steps are taken to adequately address their concerns especially the issue of unclaimed dividend. “The issue of unclaimed dividend which according to our records is in excess of N80billion will also be a thing of the past. These unclaimed dividends came about from dividends of small stakeholders like you and me and we need to ensure that they are claimed.
“Once we are able to get through with the registration process, those dividends that are less than 12 years, once the registrars can certify that the people are the owners, they should be able to pay them. Gradually we should be able to address their problem of unclaimed dividends” he said.
He also disclosed that with Direct Cash Settlement, the era where shares will be sold and the proceeds will be given to the broker who will them pay the client is over as what is obtainable now is that once the shares of an individual are sold, the proceed is paid directly into his bank account. With this once the client has authorized the broker and provided all his details, the proceeds will be paid into the client’s account.
“We have no other place to invest our little funds than in our market and that is why we are trying to cultivate your appetite and the only way to do that is to address some of these issues. Once these issues are addressed and the retail investor returns, we will be able to raise participation in the market from 2 per cent it is now to about 4 per cent in the next 10 years.