Experts advocate retail investment for capital market growth

Operators in the Nigerian capital market have called on the Federal Government to encourage retail investment for the growth of the emerging market.
The Managing Director/Chief Executive of APT Securities and Trust Limited, Mallam Kurfi Garba, argued that retail investment remained a remedy to rejuvenate and stabilise the capital market.
Mallam Kurfi told The Point that the Nigerian economy was sensitive to global development but opined that the strong participation of domestic investors in the economy would revive and stabilise every aspect.
He explained that one of the things that the market operators were hoping to develop further is domestic investor confidence, which is very critical for the long term health and stability of the market, noting that the market played an integral role in the financial sector.
He said, “Our intention is to ensure that we raise the level of participation of retail investors in the market, which is the only way we can maintain the strength of the market. Dominance of the market by foreign investors is one of the reasons why our market is in the state it is today.”
He added that the dominance of foreign investors was the usual pattern of the market and would always remain a major factor because they were the ones that come in to make money and check out any time.
“We need to upscale the participation of retail investors in the market. That is why we are addressing some of their concerns. Anyone you meet today and tell him to come back, the issue of unclaimed dividends always scare them,” he said.
However, the Director General of the Securities and Exchange Commission, Mr. Mounir Gwarzo, insisted that the effective implementation of the capital market 10-year master plan would go a long way in addressing major problems in the market.
Addressing some of the challenges that Nigeria’s Capital market faced during the global financial meltdown in 2008-2010, the SEC boss explained that educating retail investors on the need to embrace the market, will help to solve the issues of foreign dominance, adding that the Commission aims to attract more retail investors into the market in its determination to deepen and develop the market.
“We have pursued a lot of initiatives in the last year and we are pursuing more this year. We are taking it from a perspective that this market has never witnessed, which is to address some of the lingering complaints of the investor. We believe that the retail investors are the owners of this market. So, our strategy should focus on them.
“As a country we have less than two per cent participation of retail investors in our market. Malaysia has nine per cent; South Africa, 19 per cent; United States, 43 per cent, and United Kingdom, 13 per cent. So, our market is highly less being participated in by the retail investors. Due to the dominance of the foreign investors, anytime they move out, the market goes down. Our effort is to see that in the next 5-10 years, we raise the level of involvement of the retail investor to at least 5 per cent,” he said.