The Nigeria Security and Exchange Commission (SEC) has mounted a campaign on the financial sector desire to have foreign investors back in the capital market to further grow the market and the economy.
The Director-General of SEC, Mr Lamido Yuguda, said reported the intention of SEC when he received a delegation of the Senate Committee on Capital Market which visited the Nigerian Exchange Group (NGX Group) in Lagos on Friday.
He said that SEC had been trying to design regulations that give confidence to both domestic and foreign investment and investors.
He hinted that some micro-economic policies had been taken over by the Central Bank of Nigeria (CBN) and the Ministry of Finance.
Yuguda said: “We have seen the market responding to these new economic policies, such as the removal of fuel subsidy which is a huge stimulus to the fiscal aspect of the economy.”
He explained further that the policy on the unification of the Foreign Exchange (FX) rate was already generating confidence among investors.
“This is because they are dealing with one price for the FX on one hand and the removal of fuel subsidy on the other hand.
“We want foreign investors to come back into the capital market. The FX policy of the CBN is helping in that direction, but we would give them time to work,” the SEC boss said.
Yuguda said that a number of regulatory policies of SEC would improve the capital market.
According to him, they include the policy on custody of all Chartered Institute of Stockbrokers (CIS) products in the capital market, either bilateral or public are being evolved.
He explained that the CIS sector was already responding to the development, hence, the growth of Assets Under Management.
The director-general advised private sector investors to embrace the platform through the CIS vehicle into the market.
According to him, CIS are highly experienced portfolio managers who are knowledgeable enough to know the best portfolio to invest capital, rather than going directly to invest personally with high risk.
Yuguda expressed hope that the economy would witness a reduction in the fiscal deficit this year, noting that additional reductions would also be experienced in 2025 and 2026.
“Hopefully, we are expected to see a reduction in the overall government deficit, especially in the medium term.
“The overall business environment is getting much brighter and once it becomes much better, people would make different financial decisions that they would have made if the environment has actually been as it was before.
He said that pension funds managers were also rescinding their decisions of previous years to reduce their portfolios and allocation to the equity market.
He said many of the PFA’s have the perception of a better relative value in fixed income than equity, explaining that the perception was changing and would affect the capital market and economy. positively.
