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Investors want global best practices on protection

By Helen Oji
20 July 2022   |   2:38 am
Investors have stressed the need for the entire market value chain to articulate ways to conform to the right standards and global principles in assessing protections available for Nigerian investors.

Investors have stressed the need for the entire market value chain to articulate ways to conform to the right standards and global principles in assessing protections available for Nigerian investors.

Besides, the investors also urged the regulators to beef up their regulatory oversight to stem unethical conduct in the market.

The investors who spoke on the renewed efforts by regulators to boost market patronage and attract more youths to the market, said efforts to woo more investors to the market may not yield any reasonable result, unless market regulators do the needful by instituting a mechanism that aids investors’ protection.

According to them, the capital market has gone through a series of crises since the global meltdown of 2007/2008, which has necessitated major reforms and shakeouts in the operations of capital markets in many countries to restore investors’ confidence in the market.

They posited that investors lost their hard-earned money during the 2007/2008 crisis due to a series of untoward practices such as insider dealings and manipulations in Nigeria.

The investors argued that many shareholders were thrown into lifetime penury without any succour from the regulators and the State even to date.

Specifically, the President, Issuers and Investors Alternative Dispute Resolution Initiatives (IIDRI), Moses Igbrude said it is proper to have in place a vibrant investors’ protection insurance scheme against the unethical conduct of practitioners could lead to the hapless and helpless capital market investors prostrate.

He pointed out that there must be a compensation scheme for investors who innocently fall victim to such underhand practices to boost investors’ confidence and make the market more attractive.

“This way, investors’ confidence in the Nigerian capital market may be regained. Investors, still grappling with the loss of investment, occasioned by the global financial crises were faced with the dilemma arising from the sale of the three nationalised banks: Keystone Bank Limited; Mainstreet Bank; and Enterprise Bank.

“Shareholders of the banks have found themselves in a dilemma as they lost their investments estimated at N83 billion. Investigation had shown that one of the reasons retail investors show apathy toward the Nigerian stock market since the meltdown in 2009 was because of the issue of nationalised banks.

Furthermore, Igbrude also stated that there is a need for the government to take deliberate efforts to tackle some of the challenges constituting an impediment to ease of doing business in Nigeria.

“It is a good move that the regulators are making an effort to attract more investors to the market but the question is whether the Nigeria business environment is friendly enough to attract investment.

“With the high exchange rate, multiple taxes, high cost of energy and diesel, coupled with rising insecurity, the government must make deliberate efforts to address these challenges so that efforts made by the regulators will yield positive results and boost the economy.”

President of New Dimension Shareholders Association, Patrick Ajudua said there is no gainsaying the fact that the capital market is in dire need of more investors’ patronage.

However, he noted that prospective investors cannot come to the market if the existing ones are not protected.

“To boost investors’ confidence in the market and make them feel a sense of protection, the government must review unfriendly laws such as the unpopular finance act 2021 which seek to illegally annex unclaimed dividends in their desperate attempt to source for budgetary funds. They should also address the issue of double taxation which has a tendency of eating deep into the profitability of listed firms,” he said.