The Nigerian Stockbrokers: Time for Renaissance, by Sola Oni

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The Nigerian Stockbrokers: Time for Renaissance, by Sola Oni

 

“Modern technology has become a total phenomenon for civilization. the defining force of a new social order in which efficiency is no longer an option but a necessity imposed on all human activity.”

                       Jacques Ellul

Renaissance denotes rebirth and regeneration. In the marital life, 30th wedding anniversary calls for celebration of wisdom, purity and love. In the life of an organization, it creates an opportunity to review the credits and debits over the period and make prognosis towards moving to the next level.

Stockbrokers under the aegis of Chartered Institute of Stockbrokers (CIS), have  in the last two months commenced the Institute’s 30th Anniversry with a clear message of celebrating three decades of impeccable professionalism. The founding fathers of the Institute deserve a thump up for the great initiative as their labour of the past is what every stockbrokers is enjoying  today. The first phase commenced on Friday, November 4  with a thanksgiving service in the mosque in Lagos and the same was replicated in a church on Sunday,  November 6.   This was followed by a street walk through Marina in Lagos.   The Institute’s President, Mr Oluwole Adeosun,  symbolically closed  the trading in some securities exchanges as part of the celebration .

The second phase started with the investiture of past two presidents of The Nigerian Stock Exchange ( now NGX)  Alhaji Aliko Mohammed and Dr Goodie Ibru as Honourary Fellows due to their key roles in the market development. There was a definitive public lecture on the ” The Past, Present and Future” of the Institute , by Prince Abimbola Olashore. Special Awards were presented to those whose roles cannot be ignored in the formative years of the Institute.

Subsequently, the Institute held the investiture of the former military Head of State, General Ibrahim Bagbangida (rtd) in Minna, Niger State and  that of the legal luminary, Chief Christopher Ogunbanjo in Lagos. More eminent Nigerians , including Alhaji Aliko Dangote and Mr Aigboje Aig- Imoukhuede, are already scheduled for the prestigious award  in due course. A lot has changed in the operating environment of Stockbrokers in the last 30 years, however, there are many  rivers to cross.

” Despite the huge challenges and hurdles to cross, I am very proud to state that CIS’ members were instrumental to the accomplishment of several major milestones in the Nigerian economy.”, says Adeosun.  There is no doubt that stockbrokers played key roles in the implementation of  banking sector recapitalization exercise of 2005 -2007, despite some critics’ notion that the policy of N25 billion minimum capital base for banks would not succeed. Today,  many banks operate above N100 billion capital base.

The Gentlemen of the City have  always played intermediating roles in the purchase and sales of the Federal Government’s Sukuk Bond, floated to bridge funding gap for infrastructural projects and financing of budget deficits.  Stockbrokers have traded heavily in the equity market, though other asset classes such as fixed income securities, derivatives and emerging digital assets are also on the front lane.

CIS has revolutionized the certification processes by creating a Stand-Alone Programme,  which enables individuals to determine his areas of specialization in line with the global standard. Today, an Institute’s candidate can write the Examination Online from many parts of the world through remote access. But it is not heartwarming that after 30 years, CIS can only boast of just above 3000 members in a country of over 200 million people. Worst still, the future drivers of the Nigerian economy, the millennials do not appear to be interested in this important certification. Many of them could not understand why the certification is not recognized as a basis for employment in the public service, banks and universities for admission. The CISI Bill that will expand the Institute’s scope and reinforce its  rebranding for global competitiveness is currently undergoing scrutiny at the National Assembly.

The Institute parades multidimensional professionals with robust industry experience as you must have belonged to another profession before you undergo the processes of the Institute’s certification. This explains why stockbrokers  have comparative advantage in advising the government on how to deepen the capital market and leverage it to grow the economy. They advise the government  by sending communique to the Presidency and appropriate government parastatals after every Conference over the years. But there has never been a feedback. The same affects the past communiques of Association of Securities Dealing Houses of Nigeria (ASHON), an umbrella for institutional members of stockbrokers. Stockbrokers are needed in the strategic areas of economic decisions. Why is it that there is  no stockbroker at Central Bank of Nigeria’s Monetary Policy Committee (MPC), to constantly remind the members about the inverse relationship between equity prices and changes in interest rate whenever the apex Bank intends to review the Monetary Policy Rate (MPR) ? Are there certified stockbrokers at the Ministry of Finance ? What about the Ministry of Industry, Trade and Investment.? The time has come to recognize these investment doctors and  tap into  their talents to transform our financial market. The Executive Governor of Edo State, Governor Obaseki, is a Stockbroker and we have some stockbrokers at the National Assembly and at commissioner level in many states. They are all assets.

On the list of the prayers during the  Institute’s Conference,  held in Benin, in September are the need for the Federal Government to abolish the controversial Capital Gain Tax (CGT) which will increase transaction cost,  legislate that all commodities exports should go through a commodities exchange for quality control to make our commodities highly competitive in the international market and  deploy appropriate policies as risk aversion measures for digital asset classes. I hope these lofty suggestions will not go the usual way of no response.

The economy is the underlying asset that determines state of the capital market. The Federal Government should play a pivotal role of creating an enabling environment through provision of infrastructure, addressing macroeconomic vagaries , enactment of market-friendly rules, increased utilization of the capital market to finance infrastructural deficits and revisit margin loans for stockbrokers to drive liquidity into the market.   At the minimum, these shall create the much-needed enabling environment for stockbrokers.

The  30th Anniversary of the Institute calls for sober reflection on the future of securities market. It is settled in strategic business management that business growth is contingent on continuing generating a pipeline of new ideas. Stockbrokers do not need a tarot card to know that digitization shall continue to alter  the cosmic balance  of their business. You don’t need to be a stockbroker to execute transactions any longer. This comes with a great challenge to stockbrokers to train their clients on transaction processes to mitigate abuse of  transaction. Stockbrokers must constantly come with creativity and innovation to remain in business. They must invest more in technology. They must deepen their research base and learn new things to cope with the demand  of savvy investors. Leadership of the Institute and the institutional body ASHON, must wear their thinking caps to chart a roadmap for their members to flow with the tide. They must be on top of their  game.

The emergence of NASD OTC Exchange, FMDQ, AFEX and Lagos  Commodities and Futures Exchange (LCFE) with with new asset classes  has broken the age-long monopoly of NGX and presents more opportunities for stockbrokers to make money. These also come with a new challenge for stockbrokers to create new products for millennials to capture the huge niche market. The Securities and Exchange Commission (SEC), should be commended for the launch of its Revised Capital Market Master Plan, which is set to transform the entire capital market operations. But there are insinuations that inputs of ASHON and CIS were not sought  during the period of revision of the Master Plan. Absence of inputs from these major stakeholders is a lethal attack on the successful implementation of the roadmap but there is still room for dialogue. Stockbrokers operate in a highly regulated market. They must keep to the rules of the game which are largely meant to protect investors. Much as many stockbrokers have distinguished themselves as financial engineers in the last 30 years , some had paid dearly for malpractices by way of  life jail or revocation of trading licences. Some stockbrokers passed on due to the shock of the 2008 meltdown .

However, the  30th Anniversary celebration of by all known metrics, speaks to a glorious tomorrow, when the federal government shall accord the high profile professionals , their pride of place in the management of the Nigerian economy. A day the newly qualified ones shall be offered employment with jumbo package immediately after certification ; when securities exchanges shall be under pressure to meet  huge requests for Quotation Committee’s  Meeting where applications  for new issues are approved and a day  when millennials shall be on the queue to write the Institute’s professional examination . This is a trying period in the global financial market. The world economy has taken a dive, hence , this is not peculiar to Nigeria. The famous Wall Street is also under pressure as its over 4000 stockbrokers have reduced sharply. All these must pass away.

Beyond the euphoria of the 30th Anniversary celebration, the Institute’s leadership should go back to the drawing board to chart a 10-year road map on how its members shall be relevant in the changing dynamics of the global financial market. The institute   should defend its brand purpose. Happy Anniversary to a major brand . It was normal as we We sang ” For we are jolly good fellows”‘ recently, when  Adeosun closed the trading on NGX on Monday, November 7, at the  re-opening of the trading floor after the long closure due to covid-19 pandemic- Thanks to uninterrupted remote trading.

As the Nigerian stockbrokers continue to relish the 30th Anniversary , everyone should be guided by the immutable words of Will Rogers that ” Even if you’re on the right track, you’ll get run over if you just sit there.” Happy 30th Anniversary to all stockbrokers.

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