Stockbrokers to FG: Review Structure of Financial market
Stockbrokers under the auspices of Chartered Institute of Stockbrokers (CIS) have urged the Federal Government to review the structure of the Nigerian financial market to ensure its utilization and development.
The CIS also urged the FG to set up a council, comprising various professional bodies to drive savings as a strategy to encourage investors towards medium and long-term investment in Nigeria.
In a statement entitled: “The Nigeria Economic Review: Outlook and Recommendations for 2020”, the CIS said the utilisation and development of the market, especially, fixed income and equity segments will create a balanced and faster growth inclined system.
The report noted that there was a need to set up an independent council comprising banks, stockbrokers, mortgage institutions, insurance companies, and pension fund administrators and others to effectively coordinate the mobilisation of savings.
“The Federal Government should Review the structure of the entire Nigerian Financial System significantly to raise the utilization and development of the capital market, especially, fixed income and equity segments to create a balanced and faster growth inclined system. There is a need to set up an independent Council comprising Banks, Stockbrokers, Mortgage Institutions, Insurance Companies, and Pension Fund Administrators, etc. to more effectively coordinate the mobilization of savings in the country”, CIS said.
“Federal Government should institutionalize the funding framework for Capital Market Literacy (CML) in Nigeria by financially empowering CML oriented bodies, as is done in France through the IEFP. The Tertiary Education Trust Fund (Tetfund) should allocate a portion of its fund to the Capital Market Literacy (CML) drive, and to the CIS in particular. As banks control almost the entire liquidity in the Nigerian financial system, they should support capital market investments, including re-introduction of margin lending with improved regulations. CBN, being the dominant institution that currently provides liquidity support for critical economic sectors, should extend its liquidity support to the capital market, including the equity segment.
“The Federal Government should direct Pension Funds in Nigeria to look beyond fixed income investments and also invest substantially in the equities market for liquidity and stability purposes. Greater tax incentives should be granted to companies and individuals in accordance with their levels of savings and investments in formal and recognized outlets such as stock markets”, the statement said.