Don't Miss

Financial literacy will boost market participation – Experts

By BusinessNews Staff on June 22, 2014

The level of financial literacy among Nigerians plays a very important plays a major part in determining the number of retail investors that participate in the capital market.

The President, David Graduate School, Mr. Tunde Adeyemi, said this in Lagos ahead of a workshop for bankers, financial analysts and other market stakeholders.

Adeyemi explained that the workshop was being organised as a result of the understanding that the development of human capital was paramount to the growth of the nation’s economy.

The DGS President said the limited participation by retail shareholders was part of the reason why several companies were reluctant to list their shares on the Nigerian Stock Exchange via Initial Public Offering.

He stressed that the capital market would achieve more depth if companies were raising money successfully with at least 10 per cent retail investors participating.

Adeyemi said, “From the last public offer we had in the country, we discovered that the investors relied on information. But today, over 80 per cent of stockbrokers don’t go out to market company stocks anymore.

“They sit down in their offices based on their prevous experience. That is why you see foreign investors dominating the market.”

According to him, the foreign investors are being driven to invest by some fund managers, who make them realise that despite the insecurity in the country, they could get great returns on their investments.

He, therefore, called for efforts to be intensified to make domestic investors understand why they should invest.

He added, “The problem we are having in the country is that we have the people that have the money and the people that have the idea, what we are waiting for is people that will bring the two parties together, which is the financial market.

“We dont’ have venture capitalists and private equiies investors or fund managers. The regulators are coming out with differenct idea but the people that will actualise the idea are not there.”

The Vice-President of the school, Mr. Sola Opadere, called for an overhaul of the curriculum of higher institutions to address the shortage of skills and poor financial literacy level.

He said, “People are still in schools using the same handouts (used decades ago). We are focusing currently on final year students and those in graduate school, even despite having first class, second class, some of them don’t know what to do.”

[Punch]

headline