Lagos, Nigeria - Nigeria's regulatory Securities and Exchange Commission (SEC) said it had mapped out a number of strategies to re-position the capital market this year, after what it called a most challenging year in 2011. According to SEC Director-General Arunma Oteh, the strategies include measures to increase  investors' confidence, attracting the listing of critical sectors and fast tracking of corporate governance issues.

“One of the outcomes of the market retreat in December 2011 is that in 2012, boosting investors' confidence shall be our primary emphasis. We are aware that some investors have yet to recover from the losses they suffered as a result of the impact of the financial crisis,” Oteh told journalists in Lagos on Tuesday at a briefing on the activities of the regulatory body in 2011 and projections for 2012.

“We are embarking on a broad-based investor enlightenment, strong regulatory oversight and punishment of misconduct in our effort to reassure domestic and international investors that our markets are fair and efficient,” she said.

For a market that declined by 70% in less than one year, regaining investors' confidence, many analysts said, may be a difficult  task.

But the SEC boss expressed the belief that with the necessary mechanism in place, the market will rebound this year. She hinged her confidence on the various potentials in the Nigerian economy.

'The economy is growing by more than 7%, we have a huge population, the lands are so fertile that if you plant anything it will grow. The solid mineral sector remains untapped; the gas has not been fully tapped.

“There are huge investments opportunities in the power sector, by the time power issue is eventually fixed, you can imagine the great prospects for economic development. For me this is the time to start coming back to the market. So if the returns are low now, the prospect is tremendous. I am encouraging investors to take advantage of these great opportunities in our economy,” Ms Oteh said

In a country of 160 million people, it is estimated that only five million, representing about 3% of the total population, participate in the market.

But this year, SEC said it would embark on a number of initiatives to encourage and boost participation by Nigerian retail investors.

One of initiatives is to find more innovative ways of building a culture of savings and investments, while encouraging the participation of Nigerians through institutional vehicles such as mutual funds and collective investment schemes.

“In 2012, we hope to attract to the market companies operating in sectors that have little presence in our capital market. Among these are oil and gas, telecommunications and agriculture companies as well as Small Medium Enterprises,” the SEC boss said.

The regulatory body is also taking steps to address the issue of unclaimed dividends put at 41 billion naira in 2011 (US$1=156 naira).

The plan is to reduce the size of outstanding dividend by 50%, by removing operational bottlenecks that give room to accumulation of unpaid dividends.

Ms. Oteh described 2011 as a most challenging year, with the All Share Index, which opened at 7.9 trillion naira and 24,770.52 basis points on the first day of last year, declining to 6.5 trillion naira and the basis points falling to 20,730.63 by the close of 2011, representing a 16% drop from the closing figures of 2010.

She blamed the situation on several factors, including the fragile global economy, especially the downgrade of the US credit rating and the Euro zone debt crisis, the banking crisis which led to nationalization of three banks, post election security concerns and investor apathy.

Pana 22/02/2012