The regulatory intervention of the Securities and Exchange Commission in the activities of the Nigerian Stock Exchange has yielded positive results, a financial analyst has said.

According to the Lagos-based market analyst and an investment adviser, Mr. Abiodun Hakeem, the recently released financial performance of the NSE for the year 2010 showed that SEC’s reform and regulatory oversight on the Exchange were the right steps in the right direction.

He was quoted as saying this in a statement made available to our correspondent in Lagos on Tuesday.

 ÃƒÂ¢Ã¢â€šÂ¬Ã…“The NSE annual report and accounts showed that the NSE moved from a loss position of N2bn in 2009 to a profit of N357m in 2010, which goes on to prove that SEC’s intervention was timely and correct as the declining performance of The Exchange has transformed into a surplus,” he said.

For instance, he said, “The value of total volume of transactions on the Exchange closed at N797.551bn in 2010, which is about 3.22 per cent of the Gross Domestic Product, which marked an improvement compared to the figure of the preceding year.”

He also noted that by year-end, the market capitalisation of the 217 listed equities accounted for N7.92tn or 79.85 per cent of the aggregate market capitalisation, compared to N5tn or 71.04 per cent of market capitalisation in 2009.

Hakeem added that the next performance of the Exchange would likely be better than this year’s performance, following the wide range of innovations that were being put in place by the authorities.

He said, “Judging by the improved financial position of the Exchange, stronger enforcement regime and innovations, such as the introduction of Exchange Traded Funds, ETFs, commitment to stimulating performance in the fixed income market, energies invested in demutualisation, we are bound to see better result.

“Also, considering efforts geared at getting multinational corporations in the oil and gas and telecommunications to list on the Exchange, the Interim Administration has performed quite creditably.”

He, however, added that the low point in the market remained the significant and sustained loss of investor confidence, which he said had sent key performance indicators on a consistent slide.

This, he noted, was engendered by the aggregate effect of the governance lapses and poor market enforcement of old, which led to significant erosion of equity value for holders.

He added that the ongoing reforms in the market would, however, go a long way to ensure that positive activities returned to the market.

 ÃƒÂ¢Ã¢â€šÂ¬Ã…“It can only happen in the medium and long term after the reforms being undertaken by the SEC Nigeria and the NSE would have taken a firm root and have been complemented, hopefully by a lift of the pall on the world economy,” he stated.

Source:Punch/ Udeme Ekwere