AS a strategy to beat down the high cost of doing business at the capital market, stakeholders have called on the Federal Government to exempt all transactions in the market from the Stamp Duty regime due to be full enforced across the country just as they clamoured for the injection of the N90billion unclaimed dividend as bailout.
Addressing the press on the parlous state of the market Wednesday in Lagos, the coalition of the Chartered Institute of Stockbrokers (CIS), Association of Stockbroking Houses of Nigeria (ASHON) and Association of Issuing Houses of Nigeria (AIHN), under the aegis of Capital Market Alliance, lamented that the stamp duty implementation would not help the capital market and should therefore be excluded in its enforcement.
According to Mr.Seyi Abe, the acting CIS president, stamp duty is against the spirit of bringing back investors to the capital market because it is an added cost to the cost of transactions in the market.
But Emeka Madubuike, the ASHON chairman, said capital market transactions should be exempted from this policy in line with government’s waivers which the market has been enjoying since 2014, while Mr Ariyo Olushekun, the immediate CIS president, noted that transaction cost at the market “is reasonable now. It is even negotiable.
Those who do big transaction don’t pay as much as those who do little transactions. If the market is running the way it should run, investors would not worry so much about transaction cost.”
On why the market needs urgent bailout fund, Abe disclosed that the market has depreciated by about 21.25 per cent since the beginning of the year due to sell off pressure and investor apathy which are related to “adverse macro-economic situation largely due to a drastic drop in the price of oil; negative public sentiment which is related to the state of the macro-economy and retreat of foreign portfolio investors which is related to CBN policy on foreign exchnage”.
On his part, Madubuike suggested that CBN should create an intervention window of about N200billion to be accessed by market makers to shore up the market. “Each market maker should be availed of N1billion to N10billion. The Securities and Exchange Commission (SEC) should also consider structuring accrued dividend to shore up the market. The N90billion unclaimed dividend should be used for the purpose of the intervention. The money will be returned when the market rebounds. The Sovereign Wealth Fund (SWF) can also be used to stabilise the market. When the market turns around, SWF will recover its money and make profit”, he added.
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