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Tuesday, November 21, 2017.

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Nigerian News » Politics

SEC, NSE not doing enough to educate domestic investors – Obabolujo

STATISTICS have shown that local investors’ participation on the Nigerian Stock Exchange is still low despite all efforts to woo them back to the market. What in your opinion is the reason for this?

Number one, you cannot perform better than your level of your knowledge and understanding. The regulators – the stock exchange and SEC – are doing extremely low in bringing enlightenment required to the local investors. I keep saying this; for as long as the stock exchange continues to go overseas looking for foreign investors, they will continue to miss it. As a matter of fact, it is waste of resources.

Nigeria is blessed with the population. As we speak now, we are estimated to be close to 300 million or 200 million; I think the last one I saw was over 199 million people. If a country has a population of over 199 million people and you left the population unenlightened; you are not reaching out to the local people, you are not talking to them in the language they will understand. You think that what you will do is to look for foreign investors, you have failed even before the examination.

So, the level of local participation in the market is low because many of them are still groaning under the previous lost in the market; they have not recovered. Two, majority of them that suffered that fate do not know what to do having lost in their previous attempt. Three, many of these equities have even recovered.

As a matter of fact, far above  their level when the market was bullish in 2006. Between 2010 and now, we have seen Nestle crossing N1,000 (One thousand naira), and their highest price in 2008 was around N200.00. We have seen equities like Guinness Nigeria Plc and Nigeria Breweries reaching higher heights. It is only among the banks and insurance companies that remain lower than the level they were as at 2008. In some other industries, we have seen full recovery; as at today, Total is selling at over N300.00 per share. I think it was selling at close to N100.00 in 2008.

The people do not understand this; they do not understand the strategies to adopt that when you buy the shares of Oando may be at N100.00 and you now saw it at N2.00, you should buy again and when it gets to say N5 to N6, you have recovered part of your previous losses. But nobody is telling them. So, the regulators should device a system that will make these people participate in the market.

As along as the recovery of this market is left in the hands of foreign people, what we faced before is bound to repeat itself again.
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