Capital market operators task CBN on regulatory policies

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LAGOS – Some capital market operators on Thursday urged the (CBN) to pursue friendly regulatory policies that would engender economic growth and development.

They told the News Agency Nigeria (NAN) in separate interviews in Lagos that “regulatory headwinds” of the CBN affecting the growth of the nation’s capital market.

Regulatory headwinds are measures introduced by CBN and the monetary policy committee to manage inflation and liquidity in the system.

The CBN increased CRR for both public and private sector to 75 per cent and 20 per cent and enforcement of treasury single account with 25 per cent of qualified public funds withdrawn monthly.

The CBN in addition also tightened foreign sales restrictions and closed retail dutch auction sales (RDAS) window, among others.

Mr Emeka Madubuike, President, Association of Stockbroking Houses of Nigeria (ASHON), said that negative headwinds of the apex bank had the tendency of pushing up interest rate and cost of borrowing.

Madubuike said that there had been flow of funds from the capital market to the money market due to the regulatory headwinds.
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“The market has been faced with crowding effect as a result of the regulatory headwinds,” he said.

Madubuike urged the apex bank to pursue policies that would bring down interest rate to enable the capital market to play its role in capital formation.

Mr Bayo Adeleke, Secretary, Independent Shareholders Association of Nigeria (ISAN), said that the apex bank should support capital market growth by introducing friendly economic policies.

“We are appealing to the apex bank to consider the survival of the banks in making policies that affect the banks,” Adeleke said.

He said that the CBN should reconsider its position on cash reserve requirement (CRR) in the interest of the banks and economic growth.

“Holding 75 per cent of public sector deposit without paying interest to the banks is killing and the banks still pay interest on CBN loan,” Adeleke said.

Also speaking, Mr Boniface Okezie, President, Progressive Shareholders Association of Nigeria (PSAN) called for downward review of the CRR by the CBN.

Okezie said that review of the CRR was imperative for banks and the market survival, adding that, the CBN’s major reasons for the upward review was due to the general elections.

He also said that appeal became imperative because the banking sector drives the trading activities in the nation’s bourse. (NAN)
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