The Association of Securities Dealing Houses of Nigeria has said high transaction cost in the nation’s capital market remains a major impediment to investment as it is relatively higher than its international peers.
ASHON said there should be a downward review of transaction and listing costs to attract more individuals and institutional investors into the capital market. “The Federal Government is hereby called upon to pursue accommodative fiscal and monetary policies to revive the ailing economy, renew investor confidence and put the capital market on a strong pedestal,” it said in its 13-point agenda, jointly signed by its Chairman, Chief Patrick Ezeagu and the 2nd Vice Chairman, Mr Sam Onukwe.
The agenda articulated operational and regulatory issues that must be addressed in order to move the capital market forward. The trade group said, “There is an urgent and compelling need for the securities dealers to review their business models by taking a cue from the Chinese Model, Pakistan initiative or Mexican model, each of which places premium on financial inclusion through creation of one-stop financial centers across the country, especially, the rural areas where there is high concentration of financially excluded people.
“Market operators should embark on the creation of innovative, flexible and affordable products that can satisfy the needs of existing and potential investors and tradable on user-friendly technology to promote financial inclusion by attracting investors of different disposable income into the market.”
It said lack of financial literacy had excluded many investors from the market, adding that the Federal Government, capital market regulators and operators should develop a comprehensive financial literacy curriculum targeted at women, youths and physically challenged.
The document said, “ASHON should collaborate with other trade groups in the capital market to intensify advocacy by engaging the government, legislators and capital market regulators on the need to encourage trading in securities through investor-friendly legislation such as tax incentives and creation of enabling trading environment for market operators.
“There is a need for the Federal Government to take decisive steps to close the yawning gap between the capital market and the money markets which has continuously inhibited savings mobilisation for long-term capital investments in the country.
“In view of the far-reaching policies enunciated in the 10-year Capital Market Master Plan (2015-2025) of the Securities and Exchange Commission, ASHON and other major stakeholders saddled with the implementation of the master plan should conduct regular review of the plan to accommodate dynamic changes in the market, especially given the disruptive power of technology and current trends in investor psychology.”
The group said in order to create a niche market and ensure products uptake and mass adoption, capital market stakeholders and apex associations of financial services providers should collaborate without further delay.
It said, “ASHON’s initiative of floating the Lagos Commodities and Futures Exchange symbolises corporate foresight for financial inclusion and a strategic move to encourage portfolio diversification in Nigeria.
The association said its effort should be supported by SEC by way of reduction of transaction cost and regulatory bottlenecks “when it commences operations in the unfolding commodities ecosystem in Nigeria.”