Lagos — Many stakeholders in the Nigerian Stock Market believe that the market has begun to enjoy favourable sentiments from investors given the improved regulatory framework.

The capital market is a venue for the circulation and growth of wealth globally, which is why it is important for regulators to educate the people on how to invest in it. It helps to improve the future and to protect their investment in the market.

Since 2010, there have been some reform programmes to restore the Nigerian market's integrity and revive investors' confidence.

The regulatory framework being put in place by the Security and Exchange Commission (SEC) in the past years must be sustained.

There is consensus among stakeholders that the prospects for the nation's capital market have, since the crisis in 2008, become brighter.

These reforms included charging over 260 individuals and entities before the Investment and Securities tribunal for market abuses that led to the downturn, and seeking orders of disgorgement and restitution of investors.

Based on evidence of financial mismanagement and corporate governance lapses, the SEC in 2010 replaced the leadership of the Nigerian Stock Exchange (NSE). The equity market capitalization now stands at N7.18 trillion. The market has recorded a year-to-date (YTD) of over eight per cent compared with a decline of over 16 per cent last year.

There are also new products, new listing requirements, greater capacity among operators and regulators and a drastic reduction in market infraction among others.

Improving market with new rules

The instruments traded in the market are intangible and this is one of the rationales for regulation. It is also important to note that financial markets do not, for obvious reasons, tend towards equilibrium. As a result of this, they cannot be left to their own devices. Rule making is also one of the regulatory tools employed by the SEC to regulate activities in the Nigerian capital market. The other tools include registration, monitoring, investigation and enforcement.

Strengthening market institutions

There has been an over haul in recent times in the Capital Market Committee (CMC) to enhance its relevance to the growth and development of the Nigerian capital market. Consequently, the CMC was reorganised late last year with seven sub-committees emerging at the end of the exercise. The committees have been streamlined to correlate directly with the workings of the market.

Daily Trust learnt that the SEC has commenced discussions with the Bureau of Public Entreprises on the appropriate privatisation model to adopt for the Abuja Securities and Commodities Exchange (ASCE) following consultation with the Ministry of Finance and the World Bank.

Educating Nigerians on investing in stock

As part of the effort to educating Nigerians on the importance of investing in the Nigerian capital market, SEC partners Nollywood to produce a movie titled "Breeze" that will teach Nigerians about investment and saving for the future.

Arunma Oteh, the Director General of SEC says, "the commission believes that the capital market is key to transforming the society, because no nation has grown without its people saving to educate their children and to transform the country."