Nigerian capital market urged to enforce corporate governance codes
Some capital market operators on Monday urged the Securities and Exchange Commission (SEC) to ensure that stakeholders were adhering strictly to corporate governance codes.
They said in Lagos that the erosion of investor confidence in the capital market was due to poor enforcement of corporate governance codes. According to them, SEC and the Central Bank of Nigeria (CBN) need to collaborate on policy formulation to avoid mismatch of policies and further crash of the market.
Mr Wale Onigbode, the Chief Executive of Calyx Securities Ltd., said that the crisis in the management and board of SEC had worsened investor confidence in the market in spite of the strong fundamentals. Onigbode said that movement of funds from the capital market to the money market instruments had worsened the liquidity crisis in the market. He said that consistency in market regulation was key to wooing investors back to the market.
Malam GarbaKurfi, the Managing Director of APT Securities and Funds Ltd., said that the pivotal role of the capital market made it imperative for the Federal Government to pay more attention to the market. He said that the market needed strong liquidity to ensure stability and check the increasing short-term sales among investors. Mr David Adonri, the Chief Executive Officer of Lambeth Trust & Investment Ltd., said that investors would shift from fixed income securities to equities as soon as interest and inflation rates dropped to single digit rates.
“It is the responsibility of the fiscal and monetary authorities to create the policy environment that would prevent crowding out of the equities market,” he said. Adonri said that the gain recorded last week in spite of the liquidity squeeze was due to investors’ sentiment on the return of Alhaji Aliko Dangote as President of the Nigerian stock Exchange.
Meanwhile, analysis of the stock market in the week ended June 23 showed that the All-Share Index rose by 210.19 points or 0.99 per cent to close at 21,394.77. The market capitalisation grew by 1.04 per cent last week to close at N6.83 trillion against N6.76 trillion achieved in the previous week. 33 stocks recorded price appreciation compared with 28 stocks that recorded gains in the preceding week. Nigerian Breweries led the price gainers’ table, appreciating by N4 to close at N101 per share. PZCussons followed with N2.38 to close at N27 per share.
Guinness led the losers’ chart, dipping by N7.08 to close at N220 per share. 7upshares fell by N3.69 to close at N38.31 per share. In all, investors bought 930.68 million shares worth N6.33 billion in 17,744 deals compared with 2.76 billion shares valued at N7.99 billion exchanged in 16,961 deals in the corresponding week.