Stakeholders in the Nigerian capital market have urged investors to seek professional advice from operators in the market before investing.
Speaking at a workshop organized by the Capital Market Correspondent Association of Nigeria (CAMCAN) in Lagos yesterday, they said that though Nigerian investors owns 75 per cent of shares, but they trade 40 per cent leaving the remains to the foreign investors.
The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyem, who spoke on the workshop theme, “Effective Reporting of Changes in the Nigerian Capital Market,” said retail investors need to be educated on why they should take portfolio approach to investment.
He said, “It is important to do the analysis, understand where those opportunities are but certainly there are opportunities, not only in the equity side but across the various asset classes. We always advise investors to diversify their portfolios across different assets classes to mitigate risks.”
Oscar, who said that good corporate governance will ensure solid companies, noted that forcing companies to list may lead to infractions in the market, saying that a lot of energy has been spent building the foundational aspect of the market in terms of transparency, orderliness, fairness, disclosure, and more importantly how enforcement of rules and regulations.
“In the short term, you will see the huge volatility but that should not distract from those fundamental elements about good companies, making good money, running under a well governed Exchange structure and a well regulated market structure. These factors will combine to shore up investors’ confidence in these challenging times.
“As we continue to work towards achieving and sustaining this market, the importance of your role cannot be over emphasized. Financial journalists have the potential to influence investors’ behaviour. Negative reporting may result in sensationalism and put additional pressures that can force investors’ decisions negatively,” he added.
The Director General of the Securities and Exchange Commission (SEC), Mr. Mounir Gwazo, said retail investors will return to the market once their concerns are properly addressed.
“We want to address concerns of retail investors before we start wooing them into the market,” added.
According to him, the commission has inaugurated the board of Investors Protection Fund (IPF) and from next year, proceeds of shares sale will be paid directly into the account of investors.
Gwazo, who reiterated that dematerialization is very important to the growth of the market, hinted that by 2016 the Nigerian Stock Exchange would be demutualized.
Earlier, the President of CAMCAN, Mr. Goddy Egene, commended the regulators for attending the workshop, saying that in the last two years, a lot of changes have occurred in the market and there is need for cooperation of stakeholders for the progress of the market.