'POLICY INCONSISTENCY KILLING CAPITAL MARKET'

Analysts have blamed regulators for recent downturn in the Nigerian capital market, saying that policy inconsistencies of both financial market regulators of Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) are killing the capital market and that unless both become independent of each other the financial markets will continue to suffer decline in fortunes.

Speaking at different interviews, the Chief Registrar, Institute of Capital Market Registrars (ICMR), Dr. Walker Ogogo, and the President and Chief Execuitve of Value Fronteira, Dr. Martin Oluba attributed current lingering downturn in the capital market to policy somersaults.

While calling for total independence of each regulator, ICMR boss explained that the market was bugged down by factors such as Federal High Court judgment in the leadership crisis between former Director General of the Nigerian Stock Exchange (NSE), Mrs. Ndi Okereke-Onyiuke, and SEC, in which court nullified the sack of the former.

Ogogo who stated that investors were reacting to the judgment by taking to the sidelines, blamed SEC for its action. He also attributed the downturn in fortunes of rescued the banks and their equities trading at the Exchange to inconsistencies in CBN policies. He said that CBN approach towards the rescued banks was part of policy inconsistencies for which regulatory authorities in the financial system are well known, stressing that it was wrong for the apex to probate and reprobate at the same time.

He said 'You (referring to CBN) said they (rescued banks) should go and recapitalize. These banks they are asking to recapitalize are in the capital market. And we know that in the capital market they want corporate governance principles to operate properly.'The equity holders (shareholders) are the owners of the banks; then the board who provide the broad policies of these banks and the management team that runs the day to day activities of the banks. These stakeholders must be carried along.

'What the CBN is doing is almost excluding the shareholders, if care is not taking, from the recapitalization process of these banks. And again since the capital market is information driven, and CBN said that if rescued banks failed to recapitalize by September 30 that they will be liquidated.'Any investor hearing this will hesitate from putting his money in the equities of these banks since there is a possibility of these banks being liquidated. This has certainly affected investor confidence level that was not quite good before now', Dr. Ogogo stated.

He called for absolute independence of Securities and Exchange Commission (SEC) from CBN, stressing that if that is not done, SEC would remain on the apron strings of the CBN, which he said was not quite good for the capital market and the financial system.