‘Prioritise market development to attract retail investors’
Capital market stakeholders have renewed calls on government at all levels to prioritise capital market development and focus on initiatives that would attract retail investors to the market.
The stakeholders bemoaned the low level of domestic investors’ patronage in the capital market, currently put at 20 per cent, compared with 50 per cent contributors from the foreigners.
They stressed the need for government at all levels to accord capital market development the needed priority, while stockbrokers must be involved in the nation’s policy formulation.
The President of the Chartered Institute of Stockbrokers (CIS), Adekoje Adedapo, stated that
if investors’ participation in the nation’s capital market is increased by 20 per cent in the next five years, there will be a massive growth in the capital market and improvement in infrastructure deficit.
He explained that the capital market’s contributions to growth is low, when compared with other emerging markets and attributed the low retail investors’ patronage of the market to lack of awareness of its benefits.
“We need a lot of financial literacy programmes to bring the market at par with other emerging economics. Let u join hands with the regulators and operators to spread the gospel of the capital market.
“Let us take one critical steps within our jurisdiction to enhance the impact of our market in our immediate environment for th market to function optimally.i believe that there is a role that each and every one of us need to play to develop the market,” he said.
Adedapo stated that only one per cent of companies registered under the Companies Act is listed on the floor of the exchange, urging government to explore opportunities in the capital market to access cheaper funds to finance massive projects.
The Chief Executive officer of Stanbic IBTC Nominees, Akeem Oyewale, said investors patronise markets that would deliver good value and returns on investment, pointing out that retail investors were mostly affected during the 2008 global financial crisis due to their shallow knowledge of the stock market.
According to him, regulators must step up financial literacy campaign among the retail investors to enhance their ability to make informed investment decision.
He urged retail investors to participate more in the Collective Investment Scheme (CIS) and mutual funds to ensure that their investment is managed by professionals in the financial system.
“I think one way is to encourage more investment on CIS and from there you see the retail investors come back gradually. I know right now, they have been burnt, they are feeling the pain but with time, they will come back,” he said.
The President, Progressive Shareholders Association, Boniface Okezie, said the local investors have indeed lost confidence in the Nigeria capital market.
“Indeed the local investors have indeed lost confidence in the Nigeria capital market but does Government care?, when the present administration failed to reconstitute the board of SEC since they took over the leadership of this country.
“This is little, among other things expected from the government which they failed to do.The take over of the banks by CBN, nothing is being done about it and investors are losing money in the market on a daily basis. These are the things slowing the capital markets and causing investors apathy in the markets,” he said.