SECOND Set To Deepen Capital Market Non-Interest Space | Independent Newspapers Limited
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SECOND Set To Deepen Capital Market Non-Interest Space

Posted: Oct 19, 2015 at 9:01 pm   /   by   /   comments (0)

In its drive to further unlock the enormous potentials of the Nigerian Capital market, the  securities and Exchange Commission (SEC) has expressed its determination to deepen the non-interest capital market space so as to enable millions of Nigerians and people of faith to invest their savings ethically.

Director General of SEC, Mounir Gwarzo who stated this at a regional round table on Non-Interest Capital Market in Kano Monday,  with the theme “Financing Development through  Islamic Capital Market – A Viable Alternative ” disclosed that Investors worldwide are increasingly allocating their resources into Islamic a finance products adding that by the end of 2014, total assets under management in the global Islamic finance industry surpassed $2 trillion.

Gwarzo said while most people identify capital markets as an important source of medium-to-long term capital flow, there is also an amazing potential of capital markets to serve as a catalyst for financial inclusion adding that going forward, the SEC will focus on massive public enlightenment and also stronger capacity building initiatives.

He said” Our focus for this roundtable is on Sukuk, one of the most important components of the Islamic financial system. The global sukuk market continues to witness remarkable growth since after the 2008 global financial crisis as annual issuances have grown from $15 billion in 2008 to almost $120 billion in 2014.

“In fact, last year is widely considered a landmark year for Islamic finance, especially with landmark debut sukuk issuances by countries such as the UK, Hong Kong, Senegal, South Africa,  and Luxemburg. Of course the year witnessed continued strong interest from key markets of Malaysia, Saudi Arabia and the United Arab Emirates (UAE) and emerging markets like Turkey and Indonesia. There is no doubt that the sukuk market is emerging on a global scale as a viable alternative source of funding”.

While describing Malaysia, Saudi Arabia, UAE, Kuwait and Qatar as the top 5 largest Islamic finance markets in the world, in that order as they account for the highest sukuk issuances and contribute more than half of the total assets under management in the industry, Gwarzo said that with Nigeria’s population which is far more than all five countries put together, the country should be a major market for global Islamic finance market.

” With over 80 million Muslims, Nigeria is home to far more Muslims than all the 5 countries put together. Additionally, Nigeria has a larger economy than them, with the exception of Saudi Arabia. There is therefore no reason why Nigeria should not be a major global Islamic finance market” he said.

To transform Nigeria’s potential to reality in this regard, Gwarzo said the SEC in 2013 set up an industry-wide committee of experts to develop a strategic blueprint for the growth and development of Nigeria’s non-interest capital market. Their recommendations said. have been incorporated in the 10-year Capital Market Master Plan which is currently being implemented by the SEC.
“The Master plan sets a strategic direction for the non-interest capital market in Nigeria to attain at least 25% of total market capitalization. This roundtable is being organized as part of implementing one of the recommendations on enlightenment and capacity building contained in the Master Plan which is available on our website
“The development of Islamic capital markets has been a key concern of global securities regulators since the turn of the 21st century. In 2002, the International Organizations of Securities Commissions (IOSCO) set up a Committee on Islamic Capital Market in which Nigeria actively participated. Since then, the SEC has implemented a number of reforms aimed at deepening the non-interest capital market” he said.

In his address the governor of Kano state, Dr Abdullahi Umar Ganduje commended the efforts of the commission in the area of promoting depth in non-interest capital market, assuring that Kano state would be glad to be associated with the current development by the SEC, stressing that, Kano would like to be seen as a base of Islamic banking and finance for financial market development.
Also commenting, the Emir of Kano, Muhammad Sanusi II, revealed that when he was the Governor of Central Bank of Nigeria,  they were able to put some solid structures in place for non-interest banking system in the banking industry.

Sanusi disclosed that they did their best to ensure effective safety of the institutions in place, all with the intent of having sound footing for the emerging economies.

He therefore called on the policy makers to realise and appreciate the role of non-interest capital market in bridging the gaps in the nation’s financial institutions.