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Capital market: Operators decry high cost of transactions
Goddy Egene and Oluyinka Akintunde, Abuja
Capital market operators on Thursday decried the high cost of doing business in the nation's capital market, saying it was inhibiting the growth of the market.
The market operators who, spoke at the 2004 Bi-ennial Conference of the Nigeria Stock Exchange for chairmen, chief executive officers and directors of quoted companies in Abuja, said the capital market could not thrive under such high costs.
In his paper, "The Nigerian Stock Exchange, Today and Tomorrow," the Managing Director of Securities Transactions & Trust Company Limited, Mr. Godwin Obaseki, said that total transactions fees in both the primary and secondary market, amounting to about 11 per cent, were relatively high compared to other countries'.
"High cost hinders liquidity in the market, makes our market less competitive when dealing with foreign portfolio investors, it serves as a disincentive to stockbrokers, who do all the work but earn less that the regulators," he said.
According to him, cost of transactions by a London Bank in some African markets last month, showed that Nigeria accounted for the highest element of the cost. While cost in other markets hovers around 1.9 per cent and below, that of Nigeria market stands at two 2.1 per cent.
He, therefore, urged the regulatory authorities to lower their charges in order to reduce the cost of transactions and encourage more participation by both issuers and investors.
In his welcome address, the NSE President, Chief Raymond Obieri, said the conference was initiated to strengthen the relationship among the issuers of securities, market operators and other stakeholders as part of the overall effort to enhance development of the stock market.
Obieri, who was represented by the NSE First Vice President, Mr. Oba Otudeko, disclosed that the automation had brought positive implications to the market.
"Average daily transactions grew from N55.7 million in 1999 to N475 million in 2003 and currently stands at N1 billion," he said.
He said that the outlook for the stock market remained positive, adding, "The Nigerian economy and the companies listed on the exchange are relatively young and promising growth opportunities."
The PUNCH, Friday, July 2, 2004
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STOCK MARKET
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As at Thursday, July 1, 2004
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8,265
8,250
8,235
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| Nestle |
 |
N170.00 |
+150k |
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| Flour Mills |
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N22.20 |
+85k |
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| UBA |
|
N11.60 |
+55k |
|
| Conoil |
 |
N179.01 |
-894k |
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| Texaco |
|
N183.00 |
-594k |
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| NB |
|
N63.46 |
-334k |
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Volume: 45.3 million
Value: N928.6 million
Deals: 3,648
Index: 28,414.83
Mkt Cap: N2.032 trillion |
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AUTO WORLD
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