At 20 percent, the ratio of Nigeria’s capital market to its GDP size is a source of worry to the Securities and Exchange Commission (SEC), Nigerian Stock Exchange (NSE), and the capital market operators.
The market is worse off as companies in key sectors that contribute to the size of Nigeria’s GDP are not listed on the stock market.
These stakeholders made their views public while briefing journalists shortly after the quarterly capital market committee (CMC) meeting held on Wednesday in Lagos.
While the ratio of Nigeria’s capital market to GDP is low that of its peers like South Africa and Malaysia are high at 184 percent and 274 percent, respectively.
“The implication of this is that there is clearly room to do more to develop our capital market. For companies, listing on the stock exchange makes a good business sense and companies should leverage on it. It helps in wealth and income distribution,” Arunma Oteh, director general, SEC, said at the meeting.
Quarterly capital market committee meeting serves as a rally point for various stakeholders in the market to review the market performance,
look at recent trend and get updates from various sub-committees set up in line with the regulator’s objective to achieve a world class capital market.
Among other strategic considerations, SEC has set out to improve capital market competition and attraction; improve capital market scale; capital market competence and scale of operators, and grow long term savings and investment.
The SEC also expressed optimism that capital market operators will meet the minimum capital requirement set for operators before the end
of December 2014.
On recent southwards trend being witnessed in the stock market, Oscar Onyema, CEO, Nigerian Stock Exchange, said at the meeting that: “We are no where near a bear market. We anticipate that a lot of investors are on the sideline due to their perception of some risks relating to security and political situation – as they wonder where the economy is going from here.”