Operators in Nigeria’s capital market have advised regulators to make the listing requirements for accessing the Alternative Securities Market less stringent to boost participation of Small and Medium Enterprises on the platform, and grow the primary market segment of the Nigerian Stock
Exchange.
ASeM is a specialised board for emerging businesses: small and mid-sized companies with high growth potential seeking to access the capital market.
To the experts, if listing requirements are more relaxed for SMEs, it would spur activities on the platform and the SMEs would eventually list on the
Exchange.
A stockbroker with Meristem Securities, Mr. Tunji Soyinka, explained that ASEM platform gave such companies the opportunity to raise long-term capital from the capital market at relatively low cost, allowing them to grow and institutionalise.
“Such companies need to meet the regulatory requirements of the NSE, the Corporate Affairs Commission, and the Securities and Exchange Commission before they access the capital market for fresh
capital. There is a need for regulators to also intensify efforts on enlightenment and educating the SMEs operators on the necessity of being listed on the stock exchange,”
he said.
Regrettably, they noted that with the current state, financing the SMEs through the capital market was rather far below average in Nigeria, although the market offered an alternative long-term financing source.
According to 2016 market review, the NSE ASeM Index recorded marginal loss of 1.57 per cent, from 1,208.65 Index points in 2015 to 1,189.69 in 2016 due to lack of patronage by investors, reflecting the depressive nature of the primary market, which serves as the SME’s window to the global investing community.
An independent investor, Amaechi Egbo, said, “One of reasons the Small Scale Enterprises are listed on the NSE is as a result of the stringent listing conditions and unfavourable business climate.
“Government should ensure that tax reduction is granted to these enterprises. Government should also provide affordable loans to the SMEs to make them improve on their businesses and make reasonable profit that can attract them
to list.”
