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Stakeholders prescribe protection mechanisms for investors


AfriOne Ltd. manufacturing plant in Lagos. PHOTO: George Osodi/Bloomberg

Participants at a one-day forum organised by the Investment Advisers and Portfolio Managers (IAPM), in Lagos, have stressed the need for the entire market spectrum to assess protections available for Nigerian investors with global principles, and articulate ways to conform to the right standards.

The stakeholders, who spoke on the theme:
‘Protection of Investors Interest in a Volatile Global Economy,” noted that the major reasons investors patronize the stock market is for protection of their investment, noting that once investors feel that their investments are in safe hands, they remain in the market and increase their participation.

They believed that if adequate investors’ protection mechanism is instituted in the market and followed strictly, it would boost investors’ participation and boost market capitalisation.

According to them, the low patronage witnessed currently in the capital market is partly due to losses investors suffered during the 2008-2009-market downturn.

Also, the retail investors noted that the protection they got from the regulators in the past was not enough, and therefore developed apathy to return to the market.

Therefore, they submitted that proactive measures must be taken by both the regulators and operators to forestall future losses arising from poor corporate governance, advisory services, regulation, and inadequate oversight of accounts among others in the market.

Specifically, the President of Council of the IAPM, Mrs Oluwatoyin Sanni, said: “If ever there was volatile market, it is the market in which we operate across sub-Saharan Africa, and specifically Nigeria. Capital market operators must adopt global best practices in conducting their businesses.

“There must be capacity building for investors and financial advisers while self regulatory organisations like NSE, FMDQ, and others must operate in accordance to global standards, ensuring an open and transparent market.

“This is the time for operators and regulators alike to come together and articulate specific policies that exist for investors on our market and come together and agree on the appropriate ways to protect investors in our market.

“There is need to examine the protections that are currently available to investors in the market against global standards and best practices and confirm a level of its compliance and conformity and subsequently articulate on what needed to be done to bring us to the rights standards.”

The Chief Executive Officer, Stanbic IBTC Plc, Yinka Sanni, noted that government and regulators across the world has taken several proactive steps, renewed and upgraded methods to ensure safe and transparent investment ecosystem in their various jurisdictions.

He pointed out that some of these steps were taken due to crises, while others are proactive measures put in place to forestall future uncertainties as well as potential loss of investment.

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