The Nigerian Capital Market Committee (CMC) has expressed its full support for the various policy measures of the Central Bank of Nigeria (CBN), particularly on the foreign exchange (FX) markets and recapitalization of banks, in view of the socioeconomic benefits to the country.
The committee gave the commendation on the apex bank’s policies at its first meeting held on Thursday, where the members emphasized the committee’s commitment to fostering a thriving capital market environment..
Specifically, the meeting focused on critical matters affecting the Nigerian capital market, including the current global and domestic economic climate, along with recent developments and regulatory initiatives.
In his opening remarks, the Chairman of the CMC and Director-General of the Securities and Exchange Commission (SEC), Mr Lamido Yuguda, provided an assessment of the global economic landscape, acknowledging the headwinds faced by the global economy in 2023, including the pandemic’s lingering effects, rising inflation, and geopolitical tensions.
He also highlighted the impact of this slowdown on African financial markets, including the depreciation of African currencies and a decrease in total market capitalization.
On the domestic front, the Chairman expressed the committee’s satisfaction that the recent actions of the Monetary Policy Committee (MPC) had led to the recent appreciation of the value of the Naira in the FX markets as well the committee’s support for the Central Bank of Nigeria (CBN) in its efforts at strengthening the local currency and combating inflation.
Yuguda also commended the CBN for the recently announced policy on bank recapitalization and noted that the SEC had learnt useful lessons from the previous bank recapitalization exercise and would very shortly issue appropriate guidelines to facilitate an efficient capital raising process in the present exercise. The Commission committed to a process that will ensure speed, fairness, and good market conduct.
He assured the monetary authorities of the SEC’s readiness to collaborate with the CBN and other relevant agencies to ensure a smooth recapitalization process for the banks.
The SEC boss maintained that the capital market remained strong, efficient and resilient and expressed the commission’s confidence on the ability of the market to provide the needed funds in the banking recapitalization.
On the performance of the Nigerian capital market in 2023, the SEC boss told the members of the significant achievements in the market as trading activity in equities and bonds increased, with the NGX All-Share Index reaching a high of 45.90% and the FMDQ Sovereign Bond Index also recorded a reasonable 8.79% return.
While noting that activity on the NASD exchange also significantly improved, with volume and value rising by 34.08% and 24.18% respectively, Yuguda also reported the positive milestones in the Commodities Sector with AFEX and the Lagos Commodities and Futures Exchange, which recorded increased volumes and values traded in agricultural commodities.
According to him, the AFEX reported a significant growth in both volume and value of agricultural commodities traded by 34.79% and 47.84% respectively while the Lagos Commodities and Futures Exchange also recorded improvement with Agro-commodities accounting for over 96% of its total turnover during the year under review.
The CMC Chairman told the Committee that work would be intensified to ensure the passage of the Investments and Securities Bill 2024 and that implementation of the Revised Capital Market Master Plan (RCMMP) is sustained.
Yuguda disclosed that in May this year the launching of the Securities Issuers Forum would hold to discuss attracting more issuances to the market and that a roundtable on leveraging crowdfunding to support MSMEs would be held.
He underscored SEC’s commitment to embracing FinTech innovations while managing associated risks and establishing a regulatory framework for the digital asset space.
