The acting Director-General of Securities and Exchange Commission (SEC), Mary Uduk, has reacted to the handling of the sovereign yields by the Central Bank of Nigeria (CBN) and the impact it had on the equity market.
Uduk commended the CBN for preventing the crowding out of corporate from the debt market by allowing funds flow to the equity market after reducing sovereign yields. This means the CBN was able to prevent a situation where investments by businesses in goods and services were not reduced by a rise in government spending, which usually results in deficit financing, draining the available capital, thereby, causing interest rates to rise.
“Their actions in the area of foreign exchange management, and how they respond to rising inflation will play a huge role in determining market performance. However, we have confidence in their ability to do what is best for the economy.
“Having said all these, the SEC will continue to do its bit to ensure our market continues to grow. We will keep engaging eligible companies to list, government to ensure that government assets are sold through the market, and removal of the disincentives to investing in the Nigerian capital market.
“The Commission remains committed to its core mandate of protecting investors and assures the general public that it shall perform this function in line with extant securities legislation.”