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SEC allays fears of stock market downturn


The acting Director General, Securities and Exchange Commission (SEC), Ms Mary Uduk, has assured investors in the nation’s capital market that their investments will not be impacted negatively as the 2019 election approaches.

Uduk was quoted in a statement as giving the assurance while responding to questions from journalists on the sidelines of the just-concluded World Bank/International Monetary Fund Annual Meetings in Bali, Indonesia.

She said the upcoming elections might have made some investors to hold back their investments and sell or adopt a ‘wait and see’ strategy until after the elections, adding that there is nothing to worry about on that.

According to her, the major contributory factor to the current downward trend of the market is the outflow of foreign investment, which has led to sell pressures accumulating into depressed prices.

She explained that this was one of the reasons why the commission was mapping out strategies to build confidence in the market and encourage more retail investors.

She said: “We understand the importance of foreign investors for market efficiency, liquidity and transparency. However, it is also important for us to develop local investors by building their confidence and encouraging their participation.

“We have made a lot of progress in that direction like risk-based supervision, zero tolerance to infractions in the market, and complaint management framework, among others. If you do not tolerate infractions, investors will know that somebody is watching their backs”, the investment expert added.

She explained that the commission had other initiatives such as the e-dividend and direct cash settlement that were aimed at encouraging investors in the capital market.

Uduk hinted that SEC was exploring avenues to deepen the market through the introduction of different products such as derivatives, non-interest capital market products and commodities, adding that rules on derivatives as well as having a standing committee in developing a vibrant commodity ecosystem are being finalised.

Similarly, she disclosed that SEC was embracing technology innovation, which was a major theme at the IMF/World Bank meeting.

She explained: “In terms of what we have done, we are working on automating a number of our operations and we are encouraging those we regulate to embrace technology and have minimum technological standards and encourage new innovators, especially fintechs.

“Fintech companies offering capital market products and improved processes are expected to collaborate with the commission through some of our existing arrangement like the regulatory sandbox that we are currently working towards implementing.”

Uduk maintained that with all the efforts the Nigerian capital market was capable of managing its risks, becoming deeper and realising its potential.