President Goodluck Jonathan has raised hopes on the recovery of the capital market with his disclosure that Abuja will provide guidelines and incentives that will encourage the listing of major blue chip companies in the oil and gas, telecommunications, and power sectors.
But his flicker of hope for the anaemic capital market may be coming too late after several stakeholders gave up on the campaign to compel large ticket firms to list shares on the Nigerian Stock Exchange (NSE).
Between 2012 and 2014, deafening calls were made by stockbrokers, the Securities and Exchange Commission (SEC), the NSE, and investment analysts urging the government on a policy thrust that could encourage the listing of target companies.
But after the campaign seem to have lost steam, Jonathan rekindled it at an interactive session with the capital market community in Lagos trading floor.
He promised that the government would do everything economically possible to make the market attractive to investors and issuers, to demonstrate the importance attached to the capital market as a barometer that measures the performance of the economy.
He said after a proper study of the situation, the government would produce guidelines for the listing of large cap companies as one of the incentives for market recovery.
“We will certainly come up with guidelines in that regard. It is only proper to study something and meet with technical experts before coming out with the final pronouncement on it.
“But we will definitely encourage most of these companies to list and make it a condition for them if they must benefit from government in some areas. So, I believe we will give you what you want,” he said.
Jonathan noted that Nigeria, as the biggest economy in Africa, its capital market ought to equally be the largest, and the only way to achieve that is for big companies in the country to allow Nigerians invest in and benefit from their shares.
Jonathan disclosed that he had discussed with MTN during a visit to South Africa on the need to list its shares on the NSE.
“When I met with MTN in South Africa, we discussed the need for them to list. We are working hard to make sure that companies that are supposed to list do so.
“That is the only way the Nigerian capital market and economy can grow so that Nigerians can participate. Definitely, if you take the power companies, as they grow bigger they will list.”
He disclosed that a substantive director general of the SEC will be named soon, and assured market operators and executives of quoted companies that the government would continue to partner with the private sector, hands off management of businesses, and concentrate on creating an enabling environment for businesses to thrive.
“We are moving away from where the government used to be, the best manager of companies, best investors, to an area where the government will create the enabling environment for the private sector to manage the economy.”