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Shareholders suggest leeway to boost retail investors’ confidence

By Nkiruka Nnorom

Against the backdrop of the lull in the equities market and sell-off by foreign portfolio investors, FPIs, domestic retail investors have urged the regulatory bodies to pursue stabilisation policies that will attract and sustain investors’ confidence in the market.

Sitting: Edo State Governor, Mr Godwin Obaseki (2nd right); and Mr Yang Hongtao of Peiyang Chemical Equipment Company of China (PCC) (2nd left); flanked by Nigerian officials at the signing of the investment agreement for the construction of a modular refinery in Benin City, in Beijing China.

They also said that at periods of uncertainty, the Securities and Exchange Commission, SEC, and the Nigerian Stock Exchange, NSE, should make effort to weed out fraudulent operators from the market.

Data on FPIs’ participation in the equities market for the period ended July 31, 2018 showed massive sell-off compared to their domestic counterparts. The figure showed that Year-to-Date, YtD, foreign investors’ portfolio fell by N130.22 billion or 78.26 percent to N36.17 billion from N166.39 billion. On month-on-month, MoM, basis, the FPIs commitment also saw 64.78 percent decline.

On the other hand, domestic investors’ portfolio, though on decline YtD, on MoM, showed significant improvement. Ytd, domestic investors’ portfolio dropped by N118.15 billion or 51.8 percent to N109.9 billion from N228.05 billion, but MoM, it rose by 28.72 percent from N85.38 billion in June to N109.9 billion in July 2018, driven by 55.48 percent increase in the retail domestic participation.

In his reaction, Chief. Sola Abodurin, Chairman, Ibadan Zone Shareholders’ Association, said the government should keep on pursuing stabilisation policies so as to get the economy back on track.

“To make sure that interest of local investors is sustained, I think the SEC should engage in activities that will restore investors’ confidence and some of them they are doing already. Look at the issue of e-dividend mandate, so many people whose dividends have been held up for many years are now being paid. When you restore confidence in the system, investors will believe in you and they will begin to come back again,” he said.

Also speaking, Mr. Patrick Ajudua, National Chairman, New Dimension Shareholders Association, NDSA, said; “Now that the retail investors are coming back, we expect the government to make sure that their policies are consistent. Anything like policy somersault will not be good for the market. Secondly, the government should eliminate things that destroy confidence such as the issue of stamp duty collection, which we have been talking about. Once they start removing all these things, then, of course, we the domestic retail investors will have more money to continue to buy and sell shares.

“So, government needs to, continuously on its part, continue to formulate policies that are positive in nature and that have capacity of improving the capital market. These are what we are looking forward to from the government.”


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