Senator  Urge PenCom to Utilise Capital market for Better Returns 

Kayode Tokede

The Chairman, Senate Committee on Capital Market and Institutions, Osita Izunaso, yesterday advocated for the National Pension Commission (PenCom)’s N 19 trillion exposure in the capital market, calling on Pension Fund Administrators to utilize the market for better return on investment.

The Senator said this when he led other Senators, alongside the Director-General, Securities and Exchange Commission (SEC), Mr. Lamido Yuguda on a tour to the Chartered Institute of Stockbroker (CIS) building in Lagos.

He disclosed that the Senate would be having a public hearing on the Investment and Securities Bill that was not passed into law by the past administration of President Muhmmadu Buhari.  

Speaking earlier, the president, CIS, Mr. Oluwole Adeosun seeks the support of the Senate Committee on Capital Market in its quest to get the CISIN Bill passed and signed by President Bola Tinubu.

Speaking further, he said, “Another area where the institute urgently needs your support is in relation to our advocacy activities. The market capitalisation of the Nigerian capital market, as at today, is just about 14 per cent of the country’s Gross Domestic Product (GDP).

“Given this scenario, it is difficult for the market to serve its traditional role of being a barometer for gauging the economy, or to galvanise economic growth effectively. 

“The government therefore needs to come up with policies that will encourage and stimulate participation in the capital market. Large companies in the country should be encouraged to list their shares on the stock exchanges, through tax concessions and ease of doing business programmes.

“Securities dealing firms should also be encouraged through easier access to liquidity, particularly from the banks. Pension funds in the country should be guided to invest a much higher proportion of their funds in the equities market as is done in the advanced countries.”

When the delegations visited the Nigerian Exchange Limited (NGX), Izunazo assured the commitment of the Senate in driving legislative reforms that would propel the Nigerian capital market to new heights.

He emphasized the pivotal role of the capital market in fostering economic prosperity and urged stakeholders to work together towards achieving common objectives.

He said, “We are going to look at all the legislative framework in the National Assembly waiting for amendment in one form or the other.

“We are going to review the Investment and Securities bill before us, the CIS bill, as well as to revisit the Private Companies Conversion and Listings (PCCL) Bill that has been in the National Assembly since 2014 and other legislation that would drive the market.”

Izunazo added that beyond legislative efforts, there was need for aggressive public enlightenment on the benefits of investing in the stock market. He stressed the importance of these legislative interventions in incentivizing companies to list on the Exchange. “I use this opportunity to call on companies in Nigeria to get listed on the stock exchange to ensure transparency and mitigate issues of tax evasion. It would also ensure the growth of the individual companies and the economy at large.

“Our visit to NGX today is a testament to our dedication to advancing the growth agenda of the Nigerian capital market. We would continue to collaborate closely with market stakeholders to address existing challenges and unlock opportunities for growth.”

Yuguda on his part assured the Exchange of strengthening its regulatory framework aimed at supporting the Exchange and diversifying the market.

Speaking about efforts to motivate more private investors into the market, he stated. “We are doing everything that we can to get regulations that give confidence to both domestic and foreign investors. For example, we have the policy on custody of all CIS products in our market, whether bilateral or public and we have seen the CIS sector responding positively to this development. The asset under management are growing and investors are better advised to invest through the CIS because they have experienced portfolio managers who are best equipped to manage their investments.”

The Group Chairman of NGX, Umaru Kwairanga, in his remarks emphasized the need for collaborative efforts between government, regulatory bodies, and market participants to unlock the market’s full potential.

The Chief Executive Officer, NGX Group, Temi Popoola, echoed Kwairanga’s sentiments, emphasizing the importance of legislative interventions to encourage dollar-denominated transactions and the role of the capital market in revenue mobilization and tax compliance. He also highlighted the importance of pension reforms and the introduction of derivatives as instruments to mitigate market volatility.

On his part, the Ag. CEO, NGX, Mr Jude Chiemeka also highlighted the importance of pension reforms as regards increasing their allocation to equities and their leveraging of derivatives as instruments to mitigate market volatility.