Nigeria’s stock market has just lost NGN12 Billion. I am sad but not surprised.
The truth is that the Nigerian public has been stung in the past by sins of omission commited by the NSE and its regulator, the SEC. And you know what they say: ‘Once beaten twice shy’.
During a particularly promising bullish period years ago, a newly listed giant corporation decided not to give new shareholders their share certificates on time. And nobody did anything to protect the trusting shareholders. So, those people were left with tied investments and couldn’t sell even if they wanted to. Scary.
What did the stock market or the SEC do to force erring companies to do the right thing? Not enough.
This became a troubling trend. So, people couldn’t do anything as their investments crashed. This is unlike serious stock exchanges were you could quickly flip the shares of a particular company if you felt it was the right time.
I know someone who lost billions… Nigerians were watching. Trusting people invested their savings in the stock exchange.
What the Nigerian Stock Exchange, SEC Should Do
It’s a no-brainer. They should become champions of protecting consumer rights. And they should combine this with a massive PR campaign telling Nigerians what they did wrong in the past and how they have corrected it.
Only then will a good number of Nigerians learn to embrace the stock market. Nobody likes watching their investments sink into a bottomless pit because their hands have been tied from pulling those investments.
What Should The Government Do?
The Federal Government could grant generous tax breaks to small-time investors (who invest not more than, and not less than NGN 10,000). The aim would be to generate interest by allowing the public dip their toes in the NSE again.