The acting Director General, Securities and Exchange Commission, Ms Mary Uduk, has assured investors in the capital market that there is nothing to fear regarding the performance of the market as the 2019 election approaches.
Uduk was quoted in a statement as saying in response to questions from journalists on the sidelines of the just-concluded World Bank/International Monetary Fund annual meetings in Bali, Indonesia.
She said the upcoming elections might have made some investors to hold back their investments and sell or adopt a ‘wait and see’ strategy until after the elections, but added that it was nothing to worry about. According to her, the major contributory factor to the current downward trend of the market is the outflow of foreign investment, which has led to sell pressures accumulating into depressed prices.
This, she noted, was one of the reasons why the commission was mapping out strategies to build confidence in the market and encourage more retail investors. Uduk said, “We understand the importance of foreign investors for market efficiency, liquidity and transparency. However, it is also important for us to develop local investors by building their confidence and encouraging their participation.
“We have made a lot of progress in that direction like risk-based supervision, zero tolerance to infractions in the market, and complaint management framework, among others. If you do not tolerate infractions, investors will know that somebody is watching their backs.” She added that the commission had other initiatives such as the e-dividend and direct cash settlement, which she said were all geared towards encouraging investors in the Nigerian Capital Market.
Uduk stated that SEC was exploring avenues to deepen the market through the introduction of different products such as derivatives, non-interest capital market products and commodities, adding that rules on derivatives as well as having a standing committee in developing a vibrant commodity ecosystem were being finalised. She also disclosed that SEC was embracing technology innovation, which was a major theme at the IMF/World Bank meeting.
She said, “In terms of what we have done, we are working on automating a number of our operations and we are encouraging those we regulate to embrace technology and have minimum technological standards and encourage new innovators, especially fintech.
“Fintech companies offering capital market products and improved processes are expected to collaborate with the commission through some of our existing arrangement like the regulatory sandbox that we are currently working towards implementing.” Uduk added that with all the efforts the Nigerian Capital Market was capable of managing some of the risks, becoming deeper and realising its potential.