Small investors shut out of capital market

Friday Ekeoba Lagos - 10.02.2008

Small investors seeking to access the nation’s capital market so as to increase their income base may have been tactically shut out of the market.

This is as a result of the fact that operators in the market have raised new investors account’s initial deposit from about N20,000 to N250,000 for individual investors and N5 million for corporate investors, respectively.

Sunday Tribune findings revealed that although the move by the stockbroking firm is not backed by the regulatory authority in the market, but they have devised their own means of meeting the December 28, 2008 deadline given to them to recapitalize their operations.

While potential investors have started counting their losses in terms of returns in capital appreciations that would have accrued to them if they had been allowed to invest in the market, others informed that the growth of the market will adversely be affected because the pool of fund by potential investors would have helped the market’s capitalization to grow and also increase the liquidity ratio.

Speaking on the new trend in the market, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu said it has impacted negatively on the market even as it has rubbished the publicity drive of the Nigerian Stock Exchange (NSE) to educate the public on the benefits of the market.

Nwosu noted that everybody cannot be a money bag “Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE), have been encouraging small investors to invest in the market. They should come out to make a definite policy now and checkmate this menace”

Also, Oderinde Taiwo, General Manager of Corporate Investor’s Forum told Sunday Tribune that invent in the market in recent times shows that only the rich are considered for private placement and preferential and public offer allotment at the detriment of small investors.