Who’s afraid of Nigeria’s Stockbrokers ? By Sola Oni

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Who’s afraid of Nigeria’s Stockbrokers ? By Sola Oni

The Broad Street in Lagos is a replica of the Wall  Street in the United States of America.  Both Streets harbour  topnotch companies in the financial market. While the New York Stock Exchange, the largest Exchange in the world with an equity market capitalization of about $30  trillion, is the cynosure of  number 11, Wall Street, Nigerian  Exchange  Limited (NGX) on Custom Street, part of the Broad Street, is the bastion of capitalism in Nigeria. Stockbrokers  or securities dealers are at the core of capital market operations. They are the  professionals certified for financial intermediation between the market an investors. In Nigeria, stockbrokers are certified to deal in all securities, engage in asset management and investment advisory. Despite the overwhelming impacts of technology on the market operations, only dealing member firm popularly called stockbroking company can introduce compant NGX for listing.

The Act that establishes the Chartered institute of Stockbrokers (CIS), confers on it the power to certify all professionals in the business of securities. The Chartered Financial Analyst (CFA) holders,  with the acclaimed gold status, have to write requisite papers to qualify as stockbrokers to widen the scope of their operations. As part of its re-branding for global competitiveness, Nigeria’s stockbrokers’ institute has reviewed its syllabus and commenced specialization in the areas such as Equity Trading, Fixed Income Securities, Derivatives and Commodities. The institute is also engaging other professional bodies in the financial market ecosystem  to embrace the proposed Bill that will enable it to certify the securities  businesses of those members without encroachment on their strategic focus. Stockbrokers are multidimensional professionals. They have different academic backgrounds which cut across Finance, Pure Sciences, Social Sciences, Arts and Engineering amongst others. The topmost Stockbroker serving in the government in Nigeria today is Godwin Obaseki, the second term Governor of Edo State. He once publicly encouraged stockbrokers to show interest in politics, saying my background in the capital market has really enhanced my performance as a Governor. Obaseki’s statement is expected as private sector operators set targets and work towards achieving the deliverables.

As mortals, Stockbrokers may have their foibles just like other professionals, but the profession is highly regulated. Few Nigeria’s stockbrokers had served, and some are still serving in different capacities such State Commissioners, Head of Parastatals, and members of Tribunals, without blemish. Many Nigeria’s Stockbrokers are armed with credentials of global standard and rich industry experience. Some have attained the commanding heights of their other professional bodies. There are stockbrokers that run brokerage houses with billions of Naira worth of client assets and huge active brokerage accounts. But the government has not fully maximized the talents of these professionals to grow the economy. Why is the government shying away from these financial engineers ?  Prophets are not honoured by their people. The Federal Government has inaugurated countless Committees to salvage the comatose economy, I doubt if any of these Committees has a stockbroker as a member. As investment experts, they have what it takes to move the economy forward. They keep tab on all the sectors of the economy. They have technical knowledge of fundamentals of capital formation and wealth creation. Stockbrokers should be involved in budgetary planning, especially on how the government at all tiers can leverage the capital market to source funds for development projects. Involvement of stockbrokers in the fiscal and monetary policies is one easy way to reverse the disequilibrium between the money and capital market in Nigeria. Monetary policies tend to be in favour of the short-term end of the financial market, whereas short and long-term end of the  market should be complementary,as there is an inverse relationship between interest rate and equity price.

The abysmal neglect of the long-term end of the market in Nigeria has weakened the capital market’s ability to function optimally as an avenue for capital formation, mobilization, and price discovery.

By certification, every stockbroker undergoes a practical  learning curve on the nexus between the financial market and the economy, impacts of fiscal and monetary policies on a securities market,  psychology of investors in the areas of building their confidence in the market, aligning their risk appetite with investment advice, application of the rules of Nigeria’s Securities and Exchange Commission and different securities markets in Nigeria and a host of others. Stockbrokers have always through the aegis of the Institute and Association of Securities Dealing Houses of Nigeria (ASHON) held workshops and conferences to articulate policy issues to grow the economy.

In August this year, The Stockbrokers’ Institute held a classic National Workshop in Abuja on how the market can be deployed for double digit growth of the economy. Two serving ministers and many seasoned executives participated. Communique was issued one week after the Workshop. The market is still awaiting the Federal Government’s response. This month, the Institute is also set to hold its 2021 Annual flagship Conference themed “ Capital Market as a Catalyst for Economic Development and Sustainable growth “  on Thursday, October 28 to Friday, October 29 at Harbour Point, Victoria Island , Lagos. The overriding objective of the Conference is to build innovative conversations on “optimizing some elements of the capital markets to improve economic development and sustainable growth in Nigeria.” The forum which usually attracts the best-in the-class facilitators in the global financial market, shall focus on issues such as review of the controversial Petroleum Industry Act (PIA), Micro, Small and Medium Enterprises (MSMEs) as engines of economic growth and development, regulation and impacts of crowdfunding and Fintech evaluation and the capital market. Expectedly, the Conference will  come up with a strong Communique for economic transformation. I hope that top decision makers in the economy will not only attend but convince the federal government to put the Communique on the radar for immediate implementation at least for once.

A new result begins with a change of strategy. It is a sad commentary that at 61, Nigerian economy is still drifting like a rudderless boat. Government should focus on utilsing the market to grow the economy. Once the economy finds its bearing, insecurity, unemployment and other menace ravaging the country shall bow.

Occasional visits to NGX by government officials in the past had merely generated some cheap headlines.

Oni, an Integrated Communications Strategist, Chartered Stockbroker and Commodities Broker, is the Chief Executive Officer, Sofunix Investment and Communications

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