NSE demutualisation: ‘No need for foreign participation’



By Ademola Alawiye   Thursday, 9 Sep 2010


A former Director-General, Securities and Exchange Commission, Mr. Wole Adetunji, has joined other experts in condemning SEC’s pronouncement that the Nigerian Stock Exchange needs foreign investors‘ participation in its demutualisation plans.


Demutualisation is a process whereby the NSE is transformed into a profit-oriented and shareholder-owned corporation.


Experts, who spoke to our correspondent in separate interviews on Wednesday, said that the idea of inviting foreign investors to participate in the demutualisation exercise was uncalled for.


They noted that the focus of SEC should be on how to restore confidence in the capital market, adding that the issue of demutualisation should not be the focus at this time.


The Director-General, SEC, Ms Arunma Oteh, had said last week in an interview with Bloomberg that the NSE was seeking foreign investors, as part of its plans to demutualise the bourse and introduce new products, including Islamic investments.


She added,”The bourse will consider selling stakes to outside investors, including foreign exchange operators. Allowing both international investors and local investors to look at the Exchange as something they can invest in is important.”


Adetunji, however, said that there was no need to seek foreign investors’ participation.


He said, “SEC does not need to invite foreigners to demutualise the Exchange. Are we saying that Nigerians cannot float enough capital to demutualise the NSE?”


According to Adetunji, “The SEC and NSE should focus more on restoring confidence. The regulators in the financial sector should tighten up. When they are disciplined, the operators will wake up. SEC is doing well with regulation, and it needs to continue.”


Speaking in the same vein, the Deputy General Manager, Foresight Securities and Investment Limited, Mr. Sam Ailenbuade, said that the focus should be on how to restore investors‘confidence.


He said, “Let us put the right things in place before we can talk of demutualisation. When the reforms put in place have yielded results, then we can talk of demutualisation. You don‘t solve problems in isolation.”


The Managing Director, Dependable Securities Limited, Mr. Chinyere Anyanwyu, added that caution should be applied to demutualise the Exchange.


Anyanwu said, “There is need to apply caution to demutualise the NSE. The NSE is a national icon that should not be handed over to foreigners. There is no need to seek foreign investors‘participation; Nigerians have enough money to buy the NSE.”


Source:The Punch



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