The coalition of capital market operators under the aegis of the capital market alliance have restated their readiness to work with the capital market regulators to enable the government reposition the markets as a nexus for bridging infrastructural gaps.
The capital market operators include Chartered Institute of Stockbrokers (CIS), Association of Stockbroking Houses of Nigeria (ASHON) and Association of Issuing Houses of Nigeria (AIHN).
The coalition at a conference held at the Nigerian Stock Exchange (NSE), Tuesday, noted that the Nigerian capital market presented a paradox of untapped resources in the midst of cash crunch environment.
Their words: “We are ready to support the Federal Government in advisory capacity at any time the need arises on how the capital market can be fully utilised to drive economic growth and development in Nigeria.
“As Nigerians look up to the incoming government to address the financing gaps in the economy, we wish to reiterate our position on the utilisation of the capital market facilities.”
At present, the Nigerian capital market is underutilised relative to its absorptive capacity.
“The Federal Government’s goal of diversification of the economy would be reinforced if the capital market is deepened to enable it fund the capital expenditure over the short- to medium-term period,” the operators said.
They believe that the capital market can finance the entire infrastructural gaps if the government can deploy fiscal incentives to deepen the market by encouraging the companies in the telecom, power, aviation and oil and gas sectors of the economy to get listed on the securities market.
Also, participants at the conference noted that the core capital market operators should work with the regulators to come up with pragmatic timetable that will be endorsed by the Federal Government for the commencement of viable Commodity Exchanges, which are either privately owned or government owned.
“The commodity market should be developed in such a way to provide underlying instruments on which other structured products in the financial market can be developed to increase the number of tradable instruments in the capital market. For instance, Futures, Options and other derivative instrument on the underlying assets available in the commodity market,” the coalition of capital market operators said.
Among others, they also noted that incentives should be given to listed companies and prospective companies to be listed so as to have some advantage over unlisted companies.
“We propose some tax incentives for listed companies and those that are in the process of getting listed. Policies that would promote marketability of agricultural products should be enunciated and implemented to boost operations of the commodities exchange. Government at the highest level must continue to make positive statements and assurances that will engender investors’ confidence. Government borrowing rate in the capital market should drop to avoid crowding out of funds in the capital market so as to make attractive for private sector to raise funds,” the operators said.
Iheanyi Nwachukwu
