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Former Speaker of the Federal House of Representatives, Mr. Dimeji Bankole has called for the listing of big corporations operating in Nigeria on the floor of the Nigerian Stock Exchange (NSE).
Speaking as a chief guest at the Gala Night for the 20th Annual Conference of the Chartered Institute of Stockbrokers (CIS) in Lagos, he explained that the problem is endemic and not just limited to one sector, in the same way that the Nigerian economy is in need of complexity, the stock market is also in need of a broader variety of stock options.
He gave examples of the corporations that its share should be on Exchange to include major companies in the telecoms sector like MTN, GLOBACOM, AIRTEL; DISCOS and GENCOS in the Electric Power Sector; NNPC, LNG, PETROCHEMICALS, SHELL and major upstream energy companies.
He spoke on the theme “Building New Pillars, Creating New Values for Sustainable Development” according to him, at present the Nigerian Capital Market cannot serve as a true barometer for the economy because several big corporations operating in Nigeria are not publicly quoted.
The former speaker noted that the absence of these entities from the capital market, has constrained the scope and depth of the market and by so doing the market’s capacity to serve as credible investment outlet.
He said “this needs to be changed; shallowness of the Capital Market was a major reason for the asset bubble in 2007/2008 that caused the near collapse of the market. The asset bubble arose from over concentration of financial assets in few viable equities, amidst an unprecedented credit boom in the economy”.
“We need economic complexity; this means that the Government and economic regulators need to compel all major enterprises in the economy to list their shares in the capital market. These major companies make a lot of revenue from the labour of Nigerians who are unable to hold stake and share in their wealth.
“In 2008, Nigerians willingly borrowed money from banks to invest in the stock market and when the market bust, innocent Nigerians were left to pick up the pieces and there’s very little that can be said today to convince them to bring their hard-earned wages to Capital Market that in their eyes failed to protect them as the banks made profits at their expense. How can we grow a capital market that we as Nigerians have no confidence in?”
“And to renew the confidence of Nigerians in the stock market the regulatory agency must ensure its own visibility and transparency within the market. It must be seen as a credible authority with legitimacy and power to act. Boosting domestic investor confidence will send signals to the market that will attract foreign investors.
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