An Association of Capital Market Valuers in Nigeria (ACMVN) are seeking more recognition by the Securities and Exchange Commission (SEC) to enable them to list the housing sector on the stock exchange.
The association, which draws its membership mostly from the Nigerian Institution of Estate Surveyors and Valuers (NIESV), gave this assurance during a courtesy visit to SEC in Abuja recently.
The association highlighted the importance of valuation in all businesses and processes leading to fundraising through the capital market, need to have a body like ACMVN.
“When a business wants to raise money; when they need to determine how much should be raised as well as when they approach the negotiating table, valuations are needed in all instances,” the association’s chairman, Chudi Ubosi, explained.
Ubosi noted that it is imperative that accurate assessment of company assets should be done for accountability and transparency, which all help to engender investors’ confidence in the market, adding that when organisations have valuations that have integrity, it will boost investors’ confidence in the market because the investor is certain that what is being valued is actual, and nothing is hidden.
“We are aware that registration is the entry point for all capital market operators and with the enactment of the Investment and Securities Act 2007, these registrants are required to meet a certain cash/assets’ mix in their capitalisation.
In his response, SEC Director-General, Lamido Yuguda, took a look at developed countries such as the United States, where he said 20 per cent of their Gross Domestic Product (GDP) is contributed by the housing sector, making the sector a major contributor to variations in their stock market and a major contributor to the wealth of their nation.
But in Nigeria, that is not the case, as the housing sector has little impact on its GDP and its stock market due to the fact the housing system is largely controlled by individuals, who plan to keep their homes for inheritance purposes, whether in use or not, with no control by the government.
The DG cited a study carried out on the Nigerian housing market, which showed that the small mortgage units of the housing market are two-bedroom apartments, which is not sustainable with Nigeria’s level of economic development and standard of living.
He cited the Nigerian police and army not having the ability to afford their own homes in the mortgage system given the prices and availability of houses in their pay range which is the opposite of what obtains in developed countries where their defence staff can afford to start with small mortgage units and move to bigger ones as time goes on based on military discounts given to them on their mortgage by the government.
He therefore challenged the association to start seeing to the expansion of the sector to accommodate smaller mortgage units and also start bringing in relevant data and registration for a mortgage which could enable the boosting of the country’s GDP and its stock market.