By PETER EGWUATU

THE President of Chartered Institute of Stockbrokers (CIS), Mr. Muritala Olushekun, has lamented that most of the equities trading on the secondary market are currently undervalued.

He advised that the Federal Government can mop up the huge shares in the market to prevent further downward slide in prices of equities traded on the Nigerian Stock Exchange (NSE).

He stressed further that government can use Asset Management Corporation of Nigeria (AMCON) or Special Purpose Vehicle (SPV) to mop up excess shares on the secondary market.

The CIS President, while speaking with Vanguard on the state of the stock market, stressed that Pension Fund Administrators (PFAs) have major role to play in the market.

According to him, “Presently, there is 25 per cent limit bound for the PFA to invest in the equity market. This is being reviewed. They are looking at 50 and 30 per cent for maximum and minimum respectively. In fact, we need the PFAs to invest more in the equities market.

Olushekun, further berated the regulatory bodies in the capital market for not taking appropriate steps when some operators flawed the rules of the market through various mal practices.

According to him, “Investors lost confidence in the market as a result of some of the malpractices that existed in the market. So bringing back confidence will require addressing those things that led to the crash. The CIS, on its part has been in the forefront of disciplining its erring members.”

Continuing, he said, “Let me say in every professional group, you have one or two people who may not play be the rules. We have Lawyers who have had problems, same with Doctors, Accountants. In the past, we have had Accounting Firms that have been found erring in one way or the other.

“What you find is a general problem not only in Nigeria, but worldwide. However, that is not to justify any unethical practice by any Stockbroker. The issue is what the professional body does when there is a complaint. As far as the CIS is concerned, every complaint that we receive we investigate fully.

“Recently to even make it faster investigating complaints, what we have done is that we have enlarged the investigating panel; such they can operate in three different groups as soon as any complaint comes up. One group can take it up and quickly finish the investigation.

“If there is an indictment, then they declare their report and the matter referred to the Disciplinary Tribunal; and the Tribunal is a very strong one and no Stockbroker wants to appear before it. They know if truly they have done wrong, they won’t get away.”