The Securities and Exchange Commission (SEC) has admonished Credit Rating Agencies (CRAs) operating in Nigeria to focus on investors’ protection in all their dealings, services, and activities within the capital market.
“Credit rating agencies should focus on investors’ protection,” said Lamido Yuguda, director-general of the commission.
Yuguda made the call in a goodwill message delivered on his behalf by Adamu Sambo, the commission’s head of Monitoring Department, at the inaugural edition of DataPro’s Annual Webinar on Credit Rating Imperatives for Issuers and Investors.
Held recently, the Webinar, attended by participants from different parts of the world, was hosted by DataPro, a technology-driven CRA, and the Association of Issuing Houses of Nigeria (AIHN).
The event was organized to sensitize the investing public on the activities of CRAs within the capital market and also espouse the value proposition of rating reports in bridging the information asymmetry existing between Capital Market Operators (CMOs) and the investing public.
Various stakeholders within the Nigerian economy were in attendance. In his welcome address, the managing director and CEO of DataPro, Abimbola Adeseyoju called for greater socialisation of the crucial role played by CRAs in the efficient allocation of capital and resources within the economy.
“DataPro will be charting a new course in the credit rating industry in Nigeria and focusing on the way forward as well as on how investors and issuers can adapt to the new normal and drive economic growth and development through the various securities, products, and services available in the Nigerian debt market,” Adeseyoju said.
Also speaking, Bola Onadele Koko, the CEO, FMDQ Group represented by Tumi Sekoni, managing director, FMDQ Securities Exchange Limited, said that the COVID-19 Pandemic negatively affected the new wave of globalisation with a massive decline in World Trade, Foreign Direct Investment (FDI) and net travel leading to a three percent traction on global GDP in 2020.
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According to him, the Central Banks across the world reportedly cut interest rates 207 times in 2020, noting that in the face of low-interest rate, the National Governments recorded an increase of 36 percent in Sovereign Debt issuance in 2020, and Corporate Bond Issuance also increased by 66 percent in 2020 as against 2019.
He further noted that the debt capital market can transform Nigeria from building infrastructure, driving agriculture, inspiring industrialization to provide employment opportunities all of which are embedded in the mission of the FMDQ to empower markets towards delivering economic prosperity.
“Market debt, product and investment diversification, enabling environment and operating efficiency are the factors that will serve as a tailwind for the development of the Nigerian capital market,” Koko said.
He added that FMDQ Exchange is committed to galvanising the capacity of the Nigerian debt capital market, beyond being an organiser for the debt capital market by ensuring transparency, liquidity and diversity.
Further encouraged all Stakeholders to be motivated by the progress made in the debt capital market value chain and jointly seek ways to improve the liquidity and diversity of the Nigerian capital market.
Other goodwill messages were delivered by Tinuade Awe, the CEO of NGX Regulation; Philip Oduoza, chairman of Nova Merchant Bank Limited and Akin Akeredolu-Ale, the managing director of Lagos Commodities and Futures Exchange (LCFE), who all emphasised the crucial role CRAs play within the market and praised the initiative of DataPro and AIHN to organise the Webinar.
The panel discussion, themed “Accelerating the Nigerian Debt Market: What’s Next?”, was presided over by Ike Chioke, the chairman of the Association of Issuing Houses of Nigeria (AIHN) and managing director of Afrinvest.
