- SEC, NSE should take investor education more serious
Despite that the Nigerian stock market is down, there are still opportunities for investors to still make fortune in the market, but lack of awareness by local investors as what they stand to gain in participating in the market has been said to be the major problem in this jurisdiction.
The Chief Executive Officer of APT Securities and Funds Limited, a seasoned Stockbroker, Alhaji Kasimu Kurfi who disclosed this in an exclusive interview with Business247 News Online, placed the blame squarely on the door steps of The Nigerian Stock Exchange (NSE) which is the self-regulator of the market and the Securities and Exchange Commission (SEC), the statutory regulator of the market, stressing they are too complacent and not giving adequate priority to investors’ awareness.
According to him, “For the local investors, there is the need for a lot of awareness through road shows, media programmes. During the capital market boom, both the NSE (Nigerian Stock Exchange) and the SEC (Securities and Exchange Commission) had programmes on television and radio. They would invite experts to discuss about the capital market and make it a live programme where people can call in and ask questions.
“Those programmes really helped the market to grow at that time. Today, they are no more. Therefore, the local investors have nowhere to get information about the market. These programmes will be able to enlighten local investors that despite the falling of prices of stocks, the market still gives opportunities through individual stocks.
“For instance LaFarge (WAPCO), in June this year traded as low as N9.50 today, it is trading at N16.00 per share. From June to now, you are talking of about three months. In three months, the stock gained 70% and you can buy whatever quantity you want and can sell. Also, UACN was trading in early September for as low as N3.50 per share, but towards the end of the same month, it went as high as N8:00 that is a gain of over 60% I can give you other stocks that are doing well.
“With this, it is very obvious that if local investors are put in the picture, they would have been more active in securities trading and it would have been a win-win situation, more investors will come to the market and the exchange and operators will all be happy for it but there is no such programme.
“I cannot remember when either the NSE or SEC called for investors’ forum nor have roadshows in any other state outside Abuja and Lagos. So, the truth of the matter is that the NSE needs to be told that to develop local investors we need to embark roadshows, go across the states, organise it from time to time, get radio programmes, have television programmes even if it is once in a week, invite the experts and let them talk about the market.
“ If we have something like that I believe the market will perform better and the local investors will be able to understand that we cannot say because market meltdown in 2008 and we should go and then close it down. I always make a reference to unemployment and education situation in the country. Will you say because of unemployment in the country, your child will not go to school?’ Nobody dare do that because by the time the opportunities come, you are not prepared to take the opportunity. Opportunity can come anytime, anywhere.
“So, it is the same with the capital market. The capital market can go down and will rise and do better. I can tell you, last year Nestle went as high as N1,600:00 even during the meltdown, it was never more than #400:00 so, what does that mean? It shows you that there is confidence and go and check 2017 by May Nestle was trading at #500:00. So, we are saying individual stocks from time to do rise and fall. If investors know this, they can trade and make money, but this awareness is lacking.
“Coming to government, if you look at the Monetary Policy Rate (MPR), it has been at 14%, for almost two years before it came to 13.5% when the inflation was at 11%. This shows that most of the investors will go to fixed income market because they are safer and better. You get your return over and above the inflation rate.
“So, why will you take into risky business of equities. This is part of the problem but we believe that the government can still promote this by encouraging and ensuring that quoted companies are more patronised. Today, most of our construction works go to the Chinese companies and none of these Chinese companies are quoted.
“The more these companies are patronised they will bother less about being quoted. What we are saying is that we should patronise more of those companies that are quoted so that more of them will get more quoted and this will be a win-win situation as whatever earned by the quoted companies will be redistributed, some of it to the shareholders, even if you are holding 100 units, you will benefit from it. For me the Federal Government needs to come on it with the policy that will make more companies that are quoted get more patronage.
“Not only that, it is a matter of policy. Ghana makes it clear, if you are not a quoted company you will not roll out G4 and because of this policy MTN went public and rolls out 54 even faster than other telecommunications companies in Ghana. But here, we give it free of charge and many of them rolled out without being quoted. Now we are talking of G5, I hope the NCC (Nigerian Telecommunications Commission) and the government will look at this thing and say you can be allowed to go to G5 provided you a public quoted company. So, if we get such policy, it will encourage more companies to participate in the nation’s capital market”.