Capital market viability: Expert advises SEC to ensure operators play by rules

A financial expert, Uche Uwaleke, on Monday, advised the Securities and Exchange Commission (SEC) to enforce all the rules in the capital market.

Uwaleke told the News Agency of Nigeria in Abuja that poor enforcement of the rules could make the capital market unviable, saying “SEC should always monitor activities of the stockbrokers, registrars, the issuing houses and all the participants in the capital market.

“All must play by the rules because that is one way we can protect investors’ funds and make the capital market strong. The United States once had a case of regulatory failure, a situation where a lot of financial institutions gave out loans without recourse to the guidelines. When the institutions had so much default in loan repayment, it resulted to the collapse of the institutions and their share prices.’’

Uwaleke, an associate professor and head of banking and finance department, Nasarawa State University, also said a strong micro-credit could boost the capital market.

“The performance of the capital market is tied to the economy. If the economy is performing well, it trickles down and affects what happens in the capital market. When companies are doing well, their share prices rise and people will have more confidence in these companies to invest in them,’’ Uwaleke said.

He said that indicators such as the GDP growth rate, single digit inflation rate, favourable environment for employment were important to achieve this.