ASHON urges members to conduct diagnostic test on their businesses
The Association of Securities Dealing Houses of Nigeria (ASHON), a Trade Group registered by the Securities and Exchange Commission (SEC) has urged its members to conduct diagnostic test on their businesses in order to review the models in view of the dynamic changes in the global financial market.
Besides, they have identified lack of financial literacy as one of the challenges, militating against investors apathy to the capital market, calling for immediate action to step up comprehensive enlightenment programme to attract more participants, particularly, from the booming informal sector.
ASHON had in its 2019 Capital Market Summit, held in Lagos recently, with the Theme, “Financial Inclusion: The Capital Market Perspective”, proposed a 13-point agenda, jointly signed by its Chairman, Onyenwechukwu Patrick Ezeagu and 2nd Vice Chairman, Sam Onukwe respectively . The agenda articulated operational and regulatory issues that must be addressed in order to move the capital market forward with multiplier effects on the members’ businesses.
ASHON sees urgent and compelling need for the Securities Dealers to review their business models by taking a cue from the Chinese Model, Pakistan initiative or Mexican model, each of which places premium on financial inclusion through creation of one-stop financial centers across the country, especially, the rural areas where there is high concentration of financially excluded people.
It wants market operators to embark on the creation of innovative, flexible and affordable products that can satisfy the needs of existing and potential investors and tradable on userfriendly technology to promote financial inclusion by attracting investors of different dispos
able income into the market.
According to ASHON, lack of financial literacy has excluded many investors from the market; hence, the federal government, capital market regulators and operators should develop a comprehensive financial literacy curriculum, targeted at women, youths and physically challenged while Information and Communications Technology (ICT), NIPOST and other Channels are used for grass root development outreach.
“ASHON should collaborate with other trade groups in the Capital Market to intensify advocacy role by engaging the Government, Legislators and Capital Market Regulators on the need to encourage trading in securities through investor-friendly legislation such as tax incentives and creation of enabling trading environment for market operators”, ASHON said.
It further noted the need for the Federal Government to take decisive steps to close the yawning gap between the Capital Market and the Money Markets which has continuously inhibited savings mobilization for long term capital investments in the country.
In view of the far-reaching policies enunciated in the 10-year Capital Market Master Plan (2015-2025) of the Securities and Exchange Commission (SEC), ASHON noted that with other major stakeholders saddled with the implementation of the Master Plan, they should conduct regular review of the Plan to accommodate dynamic changes in the market, especially, given the disruptive power of technology and current trends in investor psychology.
“In order to create a niche market and ensure products uptake and mass adoption, Capital Market stakeholders and apex associations of financial services providers should collaborate without further delay”, ASHON added.
ASHON’S initiative of floating the Lagos Commodities and Futures Exchange (LCFE) symbolizes corporate foresight for financial inclusion and a strategic move to encourage portfolio diversification in Nigeria. This laudable effort should be supported by SEC by way of reduction of transaction cost and regulatory bottlenecks when it commences operations in the unfolding commodities ecosystem in Nigeria.
The Trade Group also called on the Federal Government to take deliberate steps to finance its infrastructural development drive through the Capital Market rather than budgetary allocation as the Capital Market option has multiplier effects of cost effectiveness and enhancing market liquidity.
ASHON wants the SEC and the CBN to collaborate to bring the 35million currently in the BVN data base into the capital market as a first step towards broadening participation in the capital Market.
It wants the Federal Government to regard investments in the Capital Market as long term savings necessary to achieve a vibrant economic growth and encourage market participants by waiving the multitude of taxation currently imposed on transactions as they are disincentives to capital formation and moblilsation.
“High Transaction cost in Nigerian Capital Market remains a major impediment to investment as it is relatively higher than its international peers. There should be a downward review of transaction and listing costs to attract more individuals and institutional investors into the Capital Market.
“The Federal Government is hereby called upon to pursue accommodative fiscal and monetary policies to revive the ailing economy, renew investor confidence and put the Capital Market on a strong pedestal.”, the statement said.