The Nigerian Capital Market Alliance has outlined an 11-point agenda for the development of the nation’s bourse under the incoming administration of President-elect Muhammadu Buhari.
The alliance comprises the Chartered Institute of Stockbrokers (CIS), Association of Stockbroking Houses of Nigeria (ASHON) and Association of Issuing Houses of Nigeria (AIHN).
The organisations said the agenda for Buhari became imperative for the bourse to reflect the continental nature of the nation’s economy.
They also said that the ongoing capital market awareness campaign which coincided with the election of Buhari, outlined issues the Federal Government must install to reposition the market.
Repositioning the market, they noted, would enhance its liquidity and capital mobilisation.
In the agenda, the operators demanded that the Federal Government, under Buhari, should deploy fiscal incentives that would make the market attractive to the different sectors of the economy.
They specifically listed the telecommunication, power, aviation, oil and gas companies to benefit from the incentives for the financing of the nation’s infrstructure gaps.
The News Agency of Nigeria (NAN) reports that the capital market development blueprint also seeks collaboration between operators and regulators in developing a timetable for the take off of a commodity exchange.
They argued that the commodity exchange either privately or government-owned should be developed to provide tradeable instruments like futures, options and other derivative instruments in the financial market.
The others are provision of tax incentives for listed companies and prospective companies, floating and implementation of policies for marketing of agricutural products and sustained government assurance to engender investors’ confidence.
The operators also urged the Federal Government to limit it’s borrowing through bonds to avoid over crowding of the capital market and make it attractive for the organised private sector.
The President, Chartered Institute of Stockbrokers (CIS), Mr Albert Okumagba, said there were several opportunities for long term financing in the capital market.
He added that certain things must be put in place to harness the opportunities.
According to him, the capital market can finance the entire infrastructure gaps if the government can deploy fiscal incentives by encouraging companies in the telecoms, power, aviation and oil and gas sectors of the economy to get listed on the securities market.
He said the core capital market operators were prepared to work with the government to ensure full utilisation of the capital market.
He also advocated for the development of a commodity market to increase the number of tradable securities, including futures and options derivative instruments and the underlying assets in the commodity market.
Mr Emeka Madubuike, Chairman, Association of Stockbroking Houses of Nigeria (ASHON), said incentives should be given to listed companies and prospective ones to be listed so as to have some advantage over unlisted companies.
He said: “We propose some tax incentives for listed companies and those that are in the process of getting listed.
“Policies that will promote marketability of agricultural products should be enunciated and implemented to boost operations of the commodities exchanges.
“Governments at the highest level must continue to make positive statements and assurances that will engender investors’ confidence.”
Mr Victor Ogiemwonyi, Chairman, Association of Issuing Houses of Nigeria (AIHN), urged the Central Bank of Nigeria (CBN) to reduce the Monetary Policy Rate (MPR) to stimulate activities in the bond market.
According to him, government borrowing rate in the capital market should drop, to avoid crowding of funds and make the market attractive for private sector to raise funds.
He said the government should revisit privatisation, to allow for the listing of its enterprises that were operating sub-optimally.
“The government needs to set up a capital market committee to work with the Bureau of Public Enterprises (BPE), to drive the process,” Ogiemwonyi said.
He promised the readiness of capital market operators to support the Federal Government in advisory capacity on how the capital market could be fully utilised to drive economic growth and development.
The group also called for regulatory support for the two existing Over-the-Counter (OTC) markets — National Association of Securities Dealers (NASD) and FMDQ platforms to enhance expansion of their operations in the financial market.
The group also demanded for a comprehensive overhaul of the collective investment scheme (CIS), operations of the Pension Commission and Mortgage savings.
They argued that the review was imperative following the dismal impact of the CIS, pension funds and mortgage resources on the capital market and the economy generally.
According to them, the operations of the three major asset classes should be given priority for the resources to be fully integrated into the economy.