Don allays fear over demutualisation of security market

AHEAD of the proposed demutualisation of the Nigerian securities market in the first quarter of 2018, a professor of Accounting and Finance at the University of Benin, has given the assurance that the policy will rejuvenate the Nigerian stock market.

Prof (Mrs) Patience Amechi Isenmila assured that the adoption of the business model would help to boost liquidity and stimulate economic growth in response to global economic competitiveness and technological advancement.

Demutualisation is transforming a stock exchange from being a self-regulatory organisation with no shareholders to a public company that is shareowner-based and profit-seeking. It allows the shares of an exchange to be quoted on the floor.

Besides, the concept typically separates ownership and voting rights from the right of access to trading on exchanges.

Prof (Mrs) Patience Amechi Isenmila gave the charge while delivering the 196th inaugural lecturer series of the University held at the Ugbowo main Campus in Benin.

The lecture titled: “Nigerian Securities market: The twists and the turns towards engendering growth”, was the first inaugural lecture presented by the only female professor in the Department of Accounting and the Faculty of Management Sciences in the University.

Isenmila, who lamented the initial hiccups demutualisation had faced since the policy was first proposed in June, 2002, listed the government policies, return on investment and lending rate as some of the factors influencing the stock exchange growth of the Securities and Exchange Commission (SEC).

The University don recalled that the Banking and Insurance sector reform between 2004 and 2007 by a former Governor of the Central Bank of Nigeria (CBN), Prof Charles Soludo, “transformed the Nigeria securities market, leading to the unprecedented growth, and “the sharp increase in market capitalisation from N12.1 trillion in 2004 to N13.2 trillion in 2017”.

According to Isenmila, the 2011 general election also had adverse effects on the securities market occasioned by uncertainty and the trust-sapping mix of the global economic meltdown which investors to pull out their investment from the market.

She revealed that despite policy measures put in place by the regulatory bodies to regulate securities market dates to the first and second indigenous policies of the Federal government, the Nigerian Securities market is still largely dominated by foreigners.

According to her, “Though we said we had indigenous participation in principle, but in practices, the foreigners’ dictates what happen.

“Most foreigners running businesses in Nigeria are more interested in what they will get. So, when the worst happens, or if anything goes wrong, they will Cary their things and leave.

She however charged the regulatory of the Federal government to intensify their supervisory roles in the Nigerian Securities market and address the illiquidity and hollowness if the market to boost investors’ confidence.

In a remark, Vice-Chancellor of the University of Benin, Prof Faraday Orumwense, who was represented by the Deputy Vice-Chancellor (Academic), Prof Pius Iribhogbe, extolled the sterling qualities of the inaugural lecturer, Prof Patience Amechi Isenmila for her academic query.