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Daily Trust

By Chris Agabi

November 4, 2011

LagosBauchi State governor Alhaji Isa Yuguda has called on both the federal and state governments to stop awarding contracts to large firms who are capable being listed on the Nigerian Stock Exchange (NSE) but refused to do so.

Large firms, most of them multinationals, in the telecoms, oil and gas companies, airlines, fast moving consumer goods and the construction sectors have refused to get quoted on the NSE, he observed.

Industry experts say if these firms get listed on the floor, they will help make the market robust and make its recovery easier in time of financial shock as was experienced in 2008.

Governor Yuguda spoke at a public policy forum organized by the Business Hallmark on ‘Restoring Market Confidence in an Era of Economic Uncertainties: Challenges and Prospects’ held in Lagos yesterday. He based his position on the context that quoted companies’ profits are more widespread because of the large shareholder base and by extension creates more wealth an economy than unquoted ones.

According to him, it makes more economic sense for government to support quoted companies than unquoted companies.

Besides patronising quoted companies as a prerequisite for award of government contracts, he advocated for a deliberate effort to get the companies listed on floor of the NSE such tax holidays for quoted firms.

He advised the stock exchange to introduce measures that will improve market liquidity, boost investors confidence, raise issuer confidence, and ensure investors protection to attract and retain investments.

Speaking on the challenges of the market, he said lack of sufficient liquidity, insufficient investor protection, high expectations for regulatory compliance and lack of market depth remain the biggest challenge of the market.

Governor Yuguda also tasked the NSE to bite some more as a regulator and reform internal operations.

Particularly, he said full disclosure by quoted companies must be enforced by NSE, brokerage firms be recapitalised, enforce corporate governance, and shorten the listing process.