Operators have said that the planned demutualisation of the Nigerian Stock Exchange will go a long way in improving activities in the market.

They noted that going by the success stories recorded by some countries that had undertaken the process of demutualisation, it was important the regulators in the Nigerian market sped up the process.

Demutualisation, a modern day international trend, is the process of converting exchanges from non-profit, member-owned organisations to for-profit, investor-owned corporations. It is seen as a trigger for the restructuring of stock exchanges, as it opens up membership to new investors as well as it changes the focus of exchanges.

The operators, however, urged capital market regulators to ensure that there was clarity of activities and that the process was as transparent as possible.They added that its transparent operation would attract more investments into the market.

The Managing Director, Partnership Investment Company Limited, Mr. Victor Ogiemwonyi, said that operators had a major role to play in terms of market activities, stressing that “it is important that operators’ opinion be sought on vital issues that affect the market.”

He explained, “The stockbrokers play a very important role in the scheme of things at the market. So, for their actions to be transparent, the regulators have to ensure that operators are kept abreast of all the plans by the NSE.

“It is crucial that the stockbrokers, and indeed, the market operators are taken into full consideration by the regulators in any decision regarding the planned demutualisation of the Exchange.”

Explaining the import of the demutualisation process, he said that it would work towards improving the market, stressing that it would open up the Exchange to more sources of income, as against a market that was not demutualised.

“Demutualisation will bring a host of new regulatory issues and it is critical that regulators and the Exchange’s management alike ensure that they are well positioned and prepared to evaluate new risks and deal with them in an effective manner,” he noted.

The President, Association of Stockbroking Houses of Nigeria, Mr. Rasheed Yusuf, had recently said that it was important for operators to be carried along on decisions affecting the capital market.

Hesaid, “The authorities in the market have to work hard to ensure that operators are taken into consideration when decisions affecting the capital market are being made.”

“There is the need to draw attention of the government and policy makers to the situation in the market. The market is currently not performing well and this is as a result of the dwindling economy. So, the government should be informed on the need to put the capital market back on track.”

“There is, therefore, the need for the government to take urgent steps to fix the economy so as to ensure the growth of the capital market,” he added.

Source: Punch/Udeme Ekwere