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Shareholders’ Group tasks NSE on investors confidence

By on March 28, 2011
SHAREHOLDERS group under the aegies of Progressive Shareholders of Nigeria has urged the Nigerian Stock Exchange (NSE) to shun the planned demutualisation of the Exchange and address the issue on how to restore confidence in the market.
The National Co-ordinator of the Assocation, Mr. Boniface Okezie explained that what is imperative in the stock market how to put strategies in place that would restore investors’ confidence in the market and sustain it.
The Interim Administrator of the NSE, Mr. Emmanuel Ikazoboh in an interview with Reuters recently said the NSE would “press ahead” the demutualisation plan after the restructuring exercise.
“NSE needs to be restructured before it presses ahead with demutualisation plans. What we intend to do is restructure the exchange to prepare it as an entity.We are going to change the council to a board of directors, we are going to look into the corporate governance structure.”
He said regulators had visited Brazil, Malaysia and South Africa to look at their various models and that one of the key issues would be determining the valuation for the bourse.
Ikazoboh also said he expected a few initial public offerings (IPOs) in the second half of the year, after Nigeria’s elections, but that more would start “trickling in” in 2012.
“ Nigeria’s stock exchange plans to create an index for fixed income securities by the end of the second quarter and plans to widen trading hours to attract more U.S. investors. Analysts say an index will help encourage more active trading in the bond market and could improve transparency in the pricing of debt instruments in Nigeria.”
According to Okezie, the NSE has been recording an unprecedented lull, even, after other Exchanges of the world has riggled out of the recession. He attributed the downturn in the market to inability of both the Exchange and its regulator to tackle the relevant issues affecting the market.
He noted that the issue of demutualisation is not the priority but to attract investors, especially the local ones, who have developed aparthy in the market back to invest their fund.
“ Is demutualisation why the market is nosediving, Is it the priority, as the market is dwindling, who is ready to buy? As things are, nobody will be ready to patronise.
“Despite the improved corporate results, the market has not picked up. For instance, with the kind of result posted by Guaranty Trust Bank, it is expected that there would be some capital appreciation but that is not happening because investors have lost confidence in the market and until this issue of confidence is addressed, the stock market would remain unstable,” he said.
Source : Vanquard