Capital market regulators have been urged to reduce the level of sanctions and penalties on quoted companies in order to encourage more companies to list in the market.
The National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, who made the call while speaking to journalists in Lagos, said the inability of companies to seek quotation on the Nigerian bourse is as a result of heavy penalties and sanctions imposed on companies by regulators.
Nwosu stated this while unveiling plans for the association’s 2016 Triennial Delegates Conference / Gala Night.
Nwosu said that sanctions imposed on quoted companies by Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) discourage companies from seeking listing on the exchange.
“We should be careful of impunity measures if we want to develop and grow the market,” Nwosu said, explaining that the spate of sanctions in the market was eroding investors’ confidence.
He added that another factor contributing to the slow growth of the market is the regulators’ preference for foreign investors.
Nwosu, therefore called on SEC and NSE to strengthen their enlightenment programmes on ways to bring retail investors back to the market.
“The market is suffering because it has minimal retail investor participation. Retail investors are the ones that will develop the market and not foreign investors that can leave at any given time,” he said.
He said that the capital market remained the best form of savings for investors in spite of its current performance due to economic headwinds.
On the listing of multinationals, Nwosu called on the federal government to use moral persuasion instead of force because so as to keep with “free entry free exit” principle.
According to him, the government failed to enter into an agreement with these companies on listing plans when they first came into the country.
The shareholder activist stated that government should, as a matter of urgency, list all its unbundled agencies to encourage companies to toe the same line.
“Government is yet to list its agencies on the exchange and we are saying that charity should begin at home,” Nwosu added.
On the conference, he said that economic experts would chart the way forward for regulation to drive Nigeria’s early recovery from recession.