Stockbrokers seek TETFUND allocation for capital market studies

 The Chartered Institute of Stockbrokers has urged the Federal Government to allocate a portion of the Tertiary Education Trust Fund for the capital market literacy drive.

In their 2020 outlook report, the CIS stated the need to overhaul the financial market to attract more investors into the capital market.

In the report titled ‘The Nigerian economic review: Outlook and recommendations for 2020’, the institute urged the Federal Government to review the entire financial system for enhanced growth and development.

They said a council that would comprise different professional bodies should be set up to drive savings as a strategy to encourage investors towards medium and long-term investment in Nigeria.

The report read in part, “The Federal Government should review the structure of the entire Nigerian financial system significantly to raise the utilisation and development of the capital market, especially fixed income and equity segments, to create a balanced and faster growth inclined system.

“There is a need to set up an independent council comprising banks, stockbrokers, mortgage institutions, insurance companies, and Pension Fund Administrators to more effectively coordinate the mobilisation of savings in the country.

“The Federal Government should institutionalise the funding framework for capital market literacy in Nigeria by financially empowering CML oriented bodies, as is done in France through the Institute for Employment and Vocational Training .”

They also argued that since banks controlled almost the entire liquidity in the Nigerian financial system, they should support capital market investments, including the reintroduction of margin lending with improved regulations.

They urged the Central Bank of Nigeria to extend its liquidity support to the capital market, including the equity segment, being the dominant institution providing liquidity support for critical economic sectors.

The report further indicated, “The Federal Government should direct pension funds in Nigeria to look beyond fixed income investments and invest substantially in the equities market for liquidity and stability purposes.

“Greater tax incentives should be granted to companies and individuals in accordance with their levels of savings and investments in formal and recognised outlets such as stock markets.”

The stockbrokers noted that in Nigeria, economic policy was largely discharged by way of continual interventions by the CBN while the Federal Government’s decision to close the country’s land borders also had significant impact on performance indicators.

Figures from the National Bureau of Statistics and the CBN showed that although there were improvements as the year went by, the key parameters of economic performance were significantly below the targets set by the Economic Recovery and Growth Plan.

The CIS said the Finance Bill, which accompanied the budget, might place more burden on taxpayers.

Source: Punchng, January 13, 2020