Reform, youth access key to capital market growth —Owoturo

Seyi Owoturo is the Managing Director/Chief Executive Officer of Coronation Registrars and Immediate past president of the Institute of Capital Market Registrars (ICMR). In this interview with KEHINDE AKINSEINDE-JAYEOBA, he says Nigeria’s capital market must deepen youth participation and unlock infrastructure financing to drive growth. He described unclaimed dividends as largely a legacy issue, while highlighting digitisation gains, and arguing that recent economic reforms are stabilising the environment and improving investor confidence. Excepts:

How would you describe the current state of Nigeria’s registrar industry in terms of growth, margins, and competition?

The registrar industry is quite unique within financial services because we do not create transactions — we participate in transactions created by other segments of the capital market.

Issuing houses generate activity through M&A, acquisitions, public offers, and other corporate actions. Those activities then produce business for registrars. So our growth is directly tied to overall market activity.

Growth has been challenging. Last year, there was only one new equity listing. There were multiple follow-on offers — especially bank rights issues — but fresh listings were limited. The bond market was also subdued due to high interest rates.

On competition, about 85–90 percent of industry activity is controlled by roughly four major registrars. However, because transactions are limited, pricing has become very aggressive. It is almost a price war. Since the service is somewhat commoditised, firms compete on efficiency and shareholder experience.

At its core, registrar business is a scale business — it thrives on volume.

We saw significant commercial paper issuances last year. Why didn’t that translate into major business for registrars?

Commercial papers are typically private placements targeted at institutional investors — sometimes just 20 to 30 participants.

Compare that to a public offer on the Nigerian Exchange (NGX), where you may have tens of thousands of investors. The difference is scale. When participation is broad, registrars have more work and greater billing capacity. With limited institutional participation, the volume simply isn’t there. It remains a volume-driven business.

What major shifts have occurred in the sector over the past five years, particularly around digitisation?

The transformation has been significant, especially post-COVID. Before the pandemic, AGMs were entirely physical. Post-trade processes like dividend payments and shareholder engagement were largely manual.

COVID forced rapid digitisation. Trading on the NGX did not stop for one day. Companies began holding virtual and hybrid AGMs. Today, investors participate in AGMs from anywhere in the world.

The primary market has also evolved. The MTN public offer was fully digital, onboarding about 130,000 new investors seamlessly. Investors submitted their BVNs and bank details digitally, received shares in their CSCS accounts, and began receiving dividends without visiting a registrar.

Today, our broker interactions are fully digital, and about 75–80 percent of shareholder engagement is digital. We continue to invest heavily in technology.

Unclaimed dividends remain a recurring issue, how serious is it, and who is responsible?

We must approach this with context. Nigeria’s total unclaimed dividends are about N200 billion. When compared to national budgets or infrastructure projects running into trillions, that figure is relatively small.

Over the past 12 years, unclaimed dividends represent about three to 3.5 percent of total declared dividends — and that includes legacy companies like First Bank Holdings, Nestlé Nigeria, Cadbury Nigeria, and Unilever Nigeria.

If you focus on newer companies like Airtel Africa, MTN Nigeria, Dangote Cement, and Seplat—companies listed after the BVN era—the figure drops to below one percent.  In fact, MTN has paid over N1 trillion in dividends since listing, with less than N500 million unclaimed.

This is largely a legacy issue from the pre-BVN era.

If someone bought shares 20 years ago, never updated their records, and perhaps passed on, dividends will accumulate. Unlike banks, capital market accounts are not formally classified as dormant.

Do registrars deliberately frustrate investors? I have no evidence of that. As former President of the Institute of Capital Market Registrars, we invited complaints and promised disciplinary action where necessary. I did not receive a single formal complaint.

Yes, we must continue reducing unclaimed dividends — but perspective is important.

What practical steps have you taken to reduce unclaimed dividends?

At Coronation Registrars, we implemented system-based solutions. For example, if an investor mandates bank details for one company and later buys shares in another company we manage, we automatically extend the mandate through internal mapping systems.

Through this approach alone, we paid out approximately N4.3 billion last year that might otherwise have remained unclaimed.

Why do you think youth participation in the capital market remains low?

Young people today want speed — instant onboarding and quick returns. The traditional capital market attracts patient capital. Buying crypto can be done within minutes on a smartphone. Opening a stockbroking account is still relatively cumbersome.

In banking, KYC is tiered. You can start small with minimal documentation and scale up. The capital market does not yet have a fully unified identity system. The SEC is working on this, and once completed, the onboarding journey should improve significantly.

Education is also critical. Many still see the capital market as gambling because they do not fully understand it. Operators must intensify investor education efforts.

During your tenure as president of the Institute of Capital Market Registrars, what reforms stood out?

We focused on elevating the Institute’s status. We revamped the curriculum to strengthen professional standards and worked closely with the SEC. One key outcome was the directive that operators must belong to recognised trade associations in good standing before renewing registration. This strengthened discipline and oversight. We also pursued a charter from the National Assembly to formalise the institute’s role, though that process was not completed during my tenure.

What has been the highlight of your leadership at Coronation Registrars?

There are about 21–22 registrars in Nigeria. Coronation Registrars manages companies representing roughly 40 percent of the NGX’s market capitalisation. Our focus has been on service quality, innovation, and seamless wealth creation for investors. We have been involved in several landmark transactions and continue to prioritise technology and efficiency.

What are your thoughts on the increase in minimum capital requirements for operators?

The goal is to strengthen the market. It is similar to the banking consolidation under former CBN Governor Charles Soludo. Higher capital requirements improved banking stability. The SEC has assessed operator risk profiles and adjusted requirements accordingly to build resilience.

How are ongoing economic reforms — such as recapitalisation and subsidy removal — impacting the capital market?

There is always a lag between reform implementation and visible impact. However, we are already seeing positive signs. The naira has stabilised significantly over the past year and a half. Exchange rate unification and subsidy removal—though painful—were necessary. Policy clarity improves planning and encourages capital formation.

The capital market has recorded strong returns this year—just under 14 percent in less than two months.

Further reforms in power, oil and gas, and infrastructure will deepen impact. The listing of entities like NNPC or Dangote Petroleum Refinery could add N15–N20 trillion to market capitalisation. That would have substantial multiplier effects.

Where do you see the most under-exploited opportunities in the capital market?

Patient capital for infrastructure. Government cannot fund infrastructure alone. Roads, rail systems, and utilities can be privately financed and publicly listed. Look at the telecom liberalisation era. Many doubted it, yet companies like MTN transformed the economy. The same can happen in infrastructure if properly structured and listed.

Is there a risk the capital market becomes overstretched as government increasingly turns to it for funding?

Capital always seeks opportunity. There is sufficient capital—domestically and internationally. Nigerians hold substantial assets abroad and are among the largest crypto participants globally. If even a fraction of that capital is redirected into productive investments, the impact would be transformative. The key is confidence, predictability, and strong regulation. If those exist, capital will flow.