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CSCS boss explains West African Capital Market Integration

By on April 1, 2014

The Chief Executive Officer, Central Securities Clearing System (CSCS), Mr. Kyari Bukar, has said that the ongoing integration of capital markets in West Africa will create more opportunities for investors in the region.

Bukar explained that the process does not just involve an integration of stock exchanges in the region, but the entire capital markets in West Africa.

He said this at the weekend while speaking at the Finance Correspondents Association of Nigeria’s (FICAN’s) bi-monthly forum hosted by CSCS in Lagos.

“It gives people in the West African zone a larger market. For example, the Nigerian capital market is around $100 billion, whereas that of the entire French speaking countries in West Africa is around $29 billion, Ghana is about $20 billion.

“So when you get those markets together, it would amount to around $300 billion. So there would be more opportunities of investing in more securities than you would have if they remain as separate countries,” the CSCS boss added.

He also advised investors to ensure that their investments are entrusted with credible, efficient and well capitalised stockbrokers.

Bukar, who spoke on the theme: “Role of Central Securities Clearing System in the Nation’s Financial Sector,” said the most important thing is to have an informed investor.

According to him, investors need to be informed for them to exercise their choices.
He also said there is also need for investors to regularly check their accounts with the CSCS.

Bukar noted that the automation of brokerage business has reduced the cost of operation for most operators.

“Previously, if it is not large volume, brokers may not efficiently service the system. But with automation of operations, some of the big stockbrokers have  have realised that servicing the customer, whether they have N1, 000 or N10 billion, is usually the same.

“Stockbrokers now require very little efforts in servicing the investors. There must be a code that the industry must develop to serve all investors,” he said.

Kyari explained that the CSCS is working with the Securities and Exchange Commission and the Nigerian Stock Exchange on a transaction cost analysis because they want to understand the total cost of each transaction to an investor.

He said that investors are always concerned about fees and other cost of transaction that follow each deal.

“Investors pay fees when they are buying shares and when exiting. We need to benchmark ourselves, against other markets,” he said.

 

 

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