Some capital market operators on Thursday said that the inability of interested dealers to raise stipulated capital was responsible for the late appointment of market makers.
They told The News Agency of Nigeria in separate interviews in Lagos that the gloomy nature of the market was compelling dealers to shy away from the high risk investment decisions.
NAN reports that a market maker is a broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security to facilitate trading in that security.
The Nigerian Stock Exchange had in its efforts to boost investor confidence fixed N500m as the minimum capital requirement for the market makers.
The Chief Executive Officer, Pac Securities Limited, Mr. Eugene Ezenwa, said that the scheme was delayed because interested market operators were yet to raise the minimum capital base of N500m.
Ezenwa said that the Exchange needed to put the necessary infrastructure in place before the scheme would take off as market making involved technology and skills.
“Besides, interested market operators need more time for the nation’s economy to stabilise,†he said.
Ezanwa said that the planned re-invigoration of the market would be attained if the regulators approached it scientifically.
The Chief Executive Officer, APT Securities and Funds Limited, Malam Garba Kurfi, said that some operators were sourcing funds to meet the requirements.
Kurfi advised that the Stock Exchange should liaise with the Central Bank of Nigeria to explore the possibility of apex banks providing the necessary financing for the market makers.
He urged the Securities and Exchange Commission to ensure speedy approval of applications of interested market makers.
The Chief Executive Officer, Standard Union Securities Limited, Mr. Sehinde Adenagbe, commended NSE for efforts aimed at restoring investor confidence and providing liquidity in the market.
Adenagbe said that the take-off of the operation would consolidate new operating rules aimed at deepening the capital market.
Source: Punch
