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SEC targets 100% market capitalisation contribution to GDP

By BusinessNews Staff on March 30, 2014

The Securities and Exchange Commission, SEC, said it plans to grow the contribution of the Nigerian Stock Exchange, NSE, market capitalisation to the Gross Domestic Product, GDP, by over 100 percent in the next 10 years from 27 percent it presently contributes.

Mounir Gwarzo, Executive Commissioner, Operations, SEC and sponsor, Capital Market Master Plan Committee, made the assertion at the Centenary Capital Market Committee Meeting in Lagos.

He noted that the objective is achievable based on available numbers, adding that countries like South Africa, Malaysia and India have achieved the feat.

He stated that within the same period, the Commission would ensure that the Nigerian capital market ranked among the top 20 markets in the world.

“We want to see that in the next 10 years, our market capitalisation should be over and above our GDP,” he affirmed.

To achieve the objective, Gwarzo explained that the SEC would seek to strengthen its regulation, while eliminating areas that have overlapping functions.

Additionally, he said that the issue of high cost of transaction would be addressed within the period to reflect what is obtainable in other climes.

“It is always said that the cost of transaction in the Nigerian capital market is high compared to other markets. We have engaged a consultant to look at our cost of transaction and benchmark it with other countries,” he observed.

He affirmed that more products would be introduced in order to drive the objective.

Also speaking at the event, Sa’adem Bello, Executive Commissioner, Legal Services, SEC, and Head, Capital Market Literacy Committee, said the Commission also targets to grow the number of local participation in the Nigerian capital market to 40 million.

She noted that findings undertaken in the course of the committee’s job revealed that paltry 3.5 million Nigerians participate in the market as at today, even as she attributed the low level of participation to little knowledge about the capital market.

“So, the committee is working as seeing that the number of local investors that participate actively in the market increases from what it is presently is,” she said.

Responding to questions on listings on the NSE, Mr. Ade Bajomo, Executive Director of the Exchange said “Listing of companies on the exchange remains a key priority to the NSE and SEC and the NSE will also ensure that listed companies are retained.”

He said there have been a lot of significant changes that the management of the Exchange has brought into the capital market in the last two years.

Speaking on the achievements of the capital market in the last 100 years, Oteh said though the market is not yet where it is supposed to be, but it has recorded tremendous achievements.

Her words: “The capital market has been the most veritable medium to raise medium and long term capital. Since 1946 when the first loan stock was floated and the establishment of the Nigerian Stock Exchange in 1961 as well as the establishment of SEC in 1980, it has always been one progressive move to the other.”

[Vanguard]

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