Mixed feelings have continued to trail the recapitalisation order given to stockbroking firms and issuing houses by the Security and Exchange Commission (SEC).

Investigations by the News Agency of Nigeria (NAN) in Lagos revealed that most capital market operators were yet to come to terms with the details of the consolidation policy. While some have expressed doubts over its workability, others see it as realistic and good for business.

Under a new policy guideline released by SEC, stockbroking firms and issuing houses have up to December 31, 2008 to increase their capital base. Issuing houses are to increase their capital base to N2 billion from N150 million and stockbroking firms, from N70 million to N1 billion. Registrars are expected to up their capital base to N500 from N50 million.

In the opinion of Chinenyem Anyanwu, the managing director of Dependable Securities Ltd., the percentage increase in the recapitalisation policy "may not be attainable." He said: "Recapitalisation of stock broking firms from N70 million to N1 billion is unprecedented by any standard. Not even the just-concluded consolidation of the banking industry witnessed such astronomical percentage increase."

Anyanwu expressed doubts about the policy's capability to achieve the set objectives. According to him, in their effort to meet the recapitlisation requirement, most brokerage firms have been demanding huge money from investors as minimum capital requirement to buy shares for them. So he warned that "it will lead to many people losing the opportunity to invest in the market."

The Managing Director of Perfecta Investment Trust Ltd., Emma Eze, stressed the need for government to revisit the issue and make it accommodating. While describing recapitalisation as a major tool for re-invigorating the capital market, Eze insisted that the "emerging character of our market must be taken into consideration."

But to Ebere Ugochukwu of Dakal Services Ltd., the consolidation policy is one of the best things to happen to the capital market. He urged stockbroking firms to take a cue from the banking sector by merging their operations for better operational leverage and profitability.