A 16-man Presidential Advisory team has been constituted by the Federal Government, in its bid to stem the continuous fall of stocks in the Nigerian capital market.
Comprising members from the public and private sectors, the team would meet regularly to articulate and implement medium to long term measures necessary for healthy growth and development of the capital market.
Members of the team include minister of finance, minister of justice/attorney General of the Federation, minister of National Planning, Chief Economic Adviser to the president, Governor of CBN, Alhaji Aliko Dangote, DG SEC, DG NSE, DG Debt management Office, Managing Director Union Bank, Plc, Managing Director, Access bank, Plc, Managing Director, Intercontinental Bank, Plc, Bolaji Balogun, Ebilate Mac-Yoroki, Kayode Falowo and Oladipo Aina.
Briefing State House Correspondents after the meeting with Vice President Goodluck Jonathan and stakeholders aimed at stabilising the Nigerian capital market, Usman said the current situation had been a source of concern to the Federal Government.
Government, through the office of the Attorney General of the Federation, is to also issue an exemption to permit share buy back up to 20per cent.
Securities and Exchange Commission (SEC) and Nigerian Stock Exchange(NSE), will also take administrative actions to stem the rate of new listings, until the market is stabilised. SEC, NSE and all capital markets operators have also agreed to reduce their fees significantly, while modalities for establishment of capital market stabilisation fund are being worked out.
In the same vein, the Central Bank of Nigeria (CBN) has started taking measures to improve the liquidity situation in the economy.
According to him, the presidential team which is expected to meet regularly, took far reaching decisions at the meeting, which include setting up of a presidential advisory team on the Nigerian capital market. He also revealed that NSE is taking steps to review its trading rules and regulations.
He said effective from today, maximum downward limit on daily price movement had been pegged at one per cent, while the current five per cent limit on upward movement was retained.
SEC, he said would release guidelines for market makers on the Nigerian Stock Exchange before the end of the week.
Speaking further, he said:
“A Presidential Advisory Team on the Nigerian Capital Market has been constituted; The Office of the Attorney General of the Federation has been directed to issue an exemption to the provisions of the relevant sections of the Companies and Allied Matters Act, 1990 on share buy-backs to permit quoted companies to buy back up to 20% of their shares. The Securities and Exchange Commission’s approval would be necessary before any quoted company is allowed to undertake any share buy-back.”
“The SEC, the Nigerian Stock Exchange (NSE) and all Capital Markets operators have agreed to reduce their fees significantly. For example, the NSE with effect from Wednesday August 27th will reduce its fees by 50%.
“The modalities for the establishment of a Capital Market Stabilization Fund are being worked out to intervene promptly, effectively and prudently in the Nigerian Stock Market as the need arises. The CBN is taking appropriate measures to review the liquidity situation in the economy and take appropriate measure to improve the liquidity in the system if required.
“The NSE is taking steps to review its trading rules and regulations. In the interim, effective Wednesday 27th August, 2008, it has taken the following steps : one per cent maximum downward limit on daily price movement whilst the current five per cent limit on upward movement is retained; The SEC would release guidelines for Market Makers on the Nigerian Stock Exchange before the end of the week; Henceforth there will be strict enforcement of NSE’s listing requirement with zero tolerance for infractions. The SEC and NSE will also take administrative actions to stem the rate of new listings until the market stabilizes; Having gone through the steps for delisting, the stock exchange will delist all the moribund companies earlier advertised.”
He also said, “ Nigerian banks would restructure existing facilities extended to licensed stock brokers, institutional and individual investors to allow for longer repayment periods.
“Nigerian Banks would partner with market makers to inject funds into the capital market through appropriately structured credit facilities.”
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