Investors identify regulatory synergy as panacea to increased market participation

Investors have cited enhanced synergy between the different arms of the financial market and the regulators, as a way of boosting participation of retail shareholders, and attracting more investors into nation’s bourse.

Stating that this is imperative for sustained capital market development, and prevention of past regulatory lapses, they also called for a paradigm shift from listed firms’ current dependence on banks and capital market financing for borrowing purposes and projects’ expansion.

The investors, who spoke against the backdrop of MTN Nigeria Communications Plc listing of shares today, Thursday, on the Nigerian Stock Exchange (NSE), by introduction, and how to attract more investors, also cited the incidence of failed banks as a contributory factor to apathy and low investors’ confidence in the market.
Unlike an Initial Public Offer (IPO), listing by introduction means the company has already raised capital prior to the listing.

Specifically, the President of Constance Shareholders Association, Shehu Makail, called for synergy among operators and regulators – Securities and Exchange Commission (SEC), NSE, the Central Bank of Nigeria (CBN), and National Pension Commission (PENCOM).

He maintained that appropriate synergy would enhance proper regulation of the industry, and reduce the prevalence of failed banks in Nigeria, which had seen shareholders lose their hard earned investments.

Also agreeing, the President Proactive Shareholders Association of Nigeria, Taiwo Oderinde, said there was need for regulatory synergy, as this would stir activities in the market and forestall future lapses experienced.“They need one another to thrive. Money is the common commodity all of them trade with. By collaborating, the regulators are taking actions geared toward growth, which will improve liquidity, boost investor confidence, raise issuer confidence and attract new listings into the market.”

An independent investor, Amaechi Egbo, also argued that enhanced collaboration among various stakeholders in the financial services will attract and sustain foreign investment, facilitate product development in the market, and reduce dependence on banks’ funding for capital market development.

“Regulators of finance such as the CBN, NAICON, SEC, NDIC, and PENCOM must collaborate. Nigeria is an emerging economy, and is also the biggest economy in Africa, so expectedly; financial activities will rise.“If this happens, it demands appropriate synergy between these regulatory authorities to collectively monitor both markets because they operate hand in hand. That will help us to properly develop and bring down the number of delisting firms, and restore investors’ confidence in the market.”

Meanwhile, MTN, Wednesday, announced that it has received approval to list on the Premium Board of NSE, which is set to proceed today by way of an introductory listing as already reported by The Guardian.

The mobile operator in a statement to The Guardian, said: “The listing by introduction means that the shares of existing MTN Nigeria shareholders will be listed without an additional public sale of shares. From this point, all MTN Nigeria shareholders will be free to trade their shares on the NSE.”

Commenting on the announcement, CEO of MTN Nigeria, Ferdi Moolman, was quoted: “It gives me great pleasure to confirm that the official listing via introduction of MTN’s shares on the NSE will take place on Thursday May 16.“We appreciate the continued support afforded us by the government, regulators and people of this great nation. In particular, I would like to thank the staff and management of MTN Nigeria who worked tirelessly to make this day possible. This is just the beginning; we still intend to pursue a future Public Offer giving more Nigerians greater access to the MTN opportunity.”

Also, MTN Group Chief Financial Officer, Ralph Mupita, said: “As MTN Group, we are very pleased that we are taking this first and important step towards increasing the local ownership of the company, and building the equity capital markets in Nigeria.”