Regulators of the Nigeria capital market need to improve on their oversight functions to check market infractions, Head of Markets, Sterling Capital, Sewa Wusu has said.

Speaking at the weekend during the Finance Correspondents Association of Nigeria (FCAN) Roundtable on the Economy held in Lagos, he said that there is also urgent need for application of more risk-based supervision as such would entrench corporate governance and deal with market infractions.

He said that despite pessimism that sufficed in the early part of last year, the Nigerian market closed with a return of 35.45 per cent while market capitalisation rose by 37.37 per cent from N6.532 trillion at the beginning of the year to N8.974 trillion.

Wusu explained that the performance was an improvement over the lull experienced in 2011 when market witnessed a negative return of -17.42 per cent but regretted that at the global arena, not all markets have recovered when compared to their 2008 levels when markets were at their peak.

He said that foreign participation accounted for over 65 per cent of total volumes of trades within the year in Nigeria, while advocating for improved domestic participation to build enhanced market confidence. This, he said can be achieved by collective investment schemes, increasing equity allocation of Pension Fund Administrators (PFAs) and creating a pool of special fund at compelling rates for market makers.

“Given the level of performance in 2012, the capital market is expected to witness another impressive performance this year. Performance will be driven more by strong macroeconomic environment, good corporate performance and companies’ fundamentals. Expected monetary policy easing in 2013 should induce investment switch to favour stock market even as bond issuance by sub nationals would continue,” he said.