SEC pushes for investment of pension funds in Capital Market

Mounir Gwarzo, director-general of the Securities and Exchange Commission (SEC) has called for the investment of the over N5 trillion Nigeria Contributory Pension Fund in the capital market to help deepen the market and stimulate the economy.

At the moment, Nigeria holds close to 70 percent of its industry-wide N5 trillion contributory pension assets (about N3.5 trillion) in the Federal Government bonds and Treasury Bills, as authorities work out other profitable, secure investment outlets for the assets accumulated over the past 10 years.

About 12 percent (approximately N600 billion) of the N5 trillion assets is invested in equities, and another 15 percent (about N750 billion) in the money market.

“The pension assets should not be lying with the FGN bond or treasury bills. Everywhere in the world, pension assets are the greatest assets in the capital market. They are not supposed to be in FGN bond or treasury bills, they are supposed to be in the market,”Gwarzo said, in Abuja, during a courtesy call by some management staff of BusinessDay led by the Editor, Philip Isakpa.

“We know we cannot play with the life savings of Nigerians that have worked for 15 to 20 years, but we think there should be ways and means, those funds can be invested in the market with maximum guarantee from government.

“Already, there have been calls advocating for the investment of the fund in infrastructural development that would yield more dividends for the contributors and government as a whole.

Gwarzo also disclosed that the apex market regulator has so far achieved 97.5% success in its demutualisation exercise that it embarked upon last year.

The achievement of a hundred percent, he said was stalled by the acquisition of two new registrars.

“Since the inception of this market, we have been battling with the issue of dematerialisation of certificates which have not been transferred into an electronic form. “We did it, by July last year, only 40 percent of the shares with the registrars had been dematerialised by the time we invited all the registrars and informed that this thing has to be done before the end of the month. We also intend to suspend from the market, any registrar that fails to do so.

“Today, I can tell you that we can boast of about 97.5 percent completion. Why we do not have hundred percent is because two registrars were acquired and also because of the reconciliation issues. So, they needed to be sorted out,” he said.

Now clients can get proceeds from the sale of their shares directly in their accounts without skirmishes with stockbrokers.

One focus of the commission for the year 2016, Gwarzo said, is to ensure that companies that have operated in the country for upward of five years be listed on the country’s Stock Exchange.

The director-general of the capital market regulating body, decried the situation where some foreign companies operating in the country have refused to be listed, but are still listed in their parent countries.

“One of the reasons why our market is shallow is because there is no depth today, because of the strength of the banking sector, once the sector drops, it has a multiplier effect on the entire market. One of the things we need to do is to make it deep, and how to make it deep is to get these companies to be listed.

“I don’t see why a company that has come to Nigeria five to ten years, is listed in its parent country and will refuse to be listed in our country,” he said.

He commended the media for their support in propagating the activities of the commission and called for more collaboration, as he plans to make the commission a knowledge-based institution in the capital.

Elizabeth Archibong & Kehinde Abdusallam