Experts task FG on NSE investment limit to boost PFAs participation

Some capital market operators on Saturday urged the Federal Government to prescribe a minimum investment limit to boost Pension Fund Administrators (PFAs) participation in the Nigerian Stock Exchange (NSE).

They told the News Agency of Nigeria (NAN) in Lagos that government needed to stipulate a minimum investment limit that PFAs could invest in the equities market following the Naira devaluation.

They said that setting a minimum investment limit would increase PFAs exposure in the market.

The limit recommended would also bridge the gap created by foreign investors exit due to the non-devaluation of the nation’s currency.

Malam Garba Kurfi, Managing Director, APT Securities and Funds Ltd, said that pegging the maximum limit at 50 per cent without a minimum limit was not good for the market.

Kurfi said that PFAs were not participating in the market as expected due to government’s silence on the minimum investment limit.

He stated that a minimum limit would encourage PFAs to jack up their investment exposure, thereby reducing the effect of foreign investors decreased participation in the market.

According to him, the government’s stance on devaluation and challenges in the foreign exchange market is affecting the volume of transactions at the market.

“Foreign investors are keeping away from our market because government decided not to devalue,’’ Kurfi said.

He added that government must devise a way to encourage foreign participation in the market.

Also speaking, Mr Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria (ISAN), said that government should not depend on foreign investors but should encourage local participation.

Nwosu said that government and market regulators should embark on enlightenment programmes to woo local investors back to the market.

NAN reports that PFAs that manage pension assets are required by law to invest a maximum of 25 per cent in the stock market.