SEC calls for prioritisation of investors’ interests in capital market transactions

THE Securities & Exchange Commission (SEC) has urged credit rating agencies (CRAs) to prioritise investors’ protection in capital market transactions.

This was disclosed in a statement released by a credit rating agency, Data Pro.

According to the statement, Director General of the Commission Lamido Yuguda made this known while speaking at a webinar held by the company and the Association of Issuing Houses of Nigeria (AIHN) last Thursday.

“The Securities & Exchange Commission (SEC) has admonished Credit Rating Agencies (CRAs) operating in Nigeria to focus on Investors’ protection in all their dealings, services and activities within the Capital Market,” it read.

Yuguda was represented by the Commission’s Head of Monitoring Department, Adamu Sambo.

Also speaking at the event was the Managing Director of Data Pro Abimbola Adeseyoju, who called for socialisation of the role of CRAs in allocating capital resources within the economy.

“According to Mr. Adeseyoju, DataPro will henceforth be charting a new course in the Credit Rating Industry in Nigeria and focusing on the way forward as well as on how Investors and Issuers alike can adapt to the new normal and drive economic growth and development through the various securities, products and services available in the Nigerian Debt Market,” it read.

Agreeing with Adeseyoju, some speakers also emphasised the importance of CRAs, including Chairman of Nova Merchant Bank Limited Philip Oduoza; Managing Director of Lagos Commodities & Futures Exchange (LCFE) Akin Akeredolu-Ale among others.

Chief Financial Officer of BUA Cement Jacques Pierkarski, while representing the Executive Director of BUA Group Kabir Rabiu, said that ratings provided by DataPro had got the company into the debt market.

“He also stated that the outcome was an eye-opener about the potentials and possibilities within the market as well as a pointer to other areas of improvement within the Group,” it read.

Panellists at the webinar spoke on challenges of the capital market and provided areas of improvement,  discussing chances of Small and Medium Enterprises (SMEs) getting rated to attract investors and capital.

Speaking on the possibility of rating SMEs, Chief Rating Officer of Data Pro Oladele Adeboye said other factors should be considered beyond the size of the company.

The factors, according to him, included: Diversity of earnings, earnings profiles, cash flow and corporate governance.

“According to him, both qualitative and quantitative information are considered in a Rating evaluation.






     

     

    “He went further to say that Companies and Entities should not only seek for Rating Reports when transactions are involved but to consider it as Corporate Strategy to aid better understanding of their fundamentals,” it read.

    Executive Director of Nova Merchant Bank Limited Funke Okoya encouraged investors to explore low-interest rates and the variation in the capital market.

    While rounding off the programme, a member of the Data Pro Rating Committee Wence Nwoga noted that the company was taking advantage of modern technology to enhance its output.

    The webinar was held to create awareness on credit ratings and close the communication gap between credit market operators and investors.

    Ijeoma Opara is a journalist with The ICIR. Reach her via [email protected] or @ije_le on Twitter.

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