11 February 2011

Nigeria: SEC - Foreign Investment Hits N381 Billion

Securities and Exchange Commission (SEC)'said Thursday that the lasting solution to Nigeria's huge infrastructure deficit was to continue to grow the capital market to a world class standard, such that the needed funds could be optimally raised from it.

SEC pointed this out, as it also revealed that the total foreign portfolio investment in 2010 in the country through the nation's capital market was N381.34 billion, which accounted for 48 percent of the aggregate turnover value. The figure also represented 88.33 percent increase over N202.483 billion recorded in the previous year.

Addressing the 26th Africa and Middle East Regional Committee of International Organisation of Securities Commissions (IOSCO -AMERC) meeting, which commenced yesterday in Mauritius, Director-General of SEC, Ms Arunma Oteh also prescribed same recipe for the remaining member countries that made up the committee.

Oteh described a world class capital market as one that engenders investor confidence with market integrity and sound regulatory framework.

"We have huge infrastructure deficit in many of our countries. I believe the solution that is common to all of us as countries is to continue to grow, what I consider, world class capital markets.

"It is important because for us to deploy the wealth of our nation on investment, to realise our full potential , we can raise the funds that we need for infrastructure from the capital market and transform our economy, to fund business expansion and new opportunities, to foster meritocracy, good governance, amongst others," she said Oteh who spoke in the capacity as the chairperson of IOSCO-AMERC lamented that while most of the member countries' economies have, in the last few years enjoyed sustained economic growth, the same growth has not been "broad-based and inclusive" as it should be.

According to her, "in most countries we are still much-focused on sector, one product." However, in a presentation of report on the Development of the Nigerian Capital Market, Oteh who reeled out the aforementioned figures obtained from the Nigeria Stock Exchange on foreign portfolio investment, enthused that , foreign investors continued to show interest despite the fluctuating prices of stocks in 2010.

She confirmed that, "some of the foreign investors returned to the market with prospects of high returns and liquidity among other opportunities that abound in the market."

The director-general expressed the optimism that "Nigeria may be one of investors' havens in 2011 considering the reforms in 2010 and the gradual return of investor confidence to the capital."

Oteh also said the total market capitalisation of the NSE stood at N10.33 trillion in 2010 compared to N7.03 trillion of the previous year, translating to an increase of N3.3 trillion.

Out of the whole N10.33trillion capitalisation, she explained, equities market capitalisation accounted for N7.90 trillion in the year under review, having appreciated by 58.5 percent from N4.99 trillion in 2009. She added that the debt market capitalisation grew from N2.04 trillion in the preceding year to N2.41 trillion in 2010.

Oteh dropped the hint that the revised Code of Corporate Governance for public companies will be launched on April 4, this year.

She noted that the revised Code had been exposed to shareholders as well as the general public. The 26th IOSCO-AMERC meeting is an opportunity for member countries to reflect on the 25 years of cooperation within AMERC and the challenges faced by securities Regulators in the wake of the global financial crisis.

AMERC consists of 20 member countries, namely, Algeria, Bahrain, Dubai, Egypt, Ghana, Israel, Cote d'Ivoire, Jordan, Kenya, Malawi, Mauritius, Morocco, Nigeria, Oman, Saudi Arabia, South Africa, Syria, Tanzania, Tunisia, Uganda, United Arab Emirates and Zambia.

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