Some of the Chief Executive Officers of the leading Dealing Member Firms, popularly called the ‘Top Ten Houses’ which traded N36.45 billion shares, accounting for 77.36 percent of the total transactions on The Nigerian Stock Exchange last week have explained the strategies and tactics that enabled them to dominate the market and provided tips to delight investors.
On the Honour’s Roll are : EFG Hermes Nigeria Limited, Stanbic IBTC Stockbrokers Limited, Apex Asset Management Limited, Chapel Hill Denham Securities Limited, CSL Stockbrokers Limited, Cardinal Stone Securities Limited, Rencap (Nigeria) Securities Limited, Nigerian International Securities Limited, Meristem Stockbrokers Limited and Cordros Securities Limited.
Market watchers at the weekend, observed that although the leading firms have financial muscles to play the market, it was not always a tea party for them, as they sometimes contend with challenges such as share dumping by nervous investors in the face of macroeconomic vagaries and insecurity which often raise the country risk profile, trigger bearish run and dampen investor confidence.
Besides, many foreign investors are said to have currently developed cold feet towards investment on The Exchange due to difficulty in repatriating Dollar, following relative scarcity of the hard currency in Nigeria. Many of them are also believed to adopt flights to safety whenever they spot more profitable assets in their country.
Some of The Chief Executive Officers of the Top Ten, who volunteered information for The Kernel at the weekend, attributed their best-in-class performance to factors such as deep knowledge of the global economy and financial market, topnotch customer engagement policy, strong research base, professional portfolio management in the wake of COVID-19 pandemic and deployment of modern technologies.
“ We have a strong understanding of the Nigerian economy and global financial market. This has enabled us to advise our clients worldwide appropriately during this time, and it is clear that they share our views of the market with the strong performances that have been witnessed by our firm. Also, our Trade Button, which is a virtual trading platform that offers real time access to the equities market, has encouraged our clients’ continued access to the market. They have supported our business immensely while they stay safe in their homes.
“ Investors should make strategic decisions in investible securities and products. For instance, the Cordros Dollar Fund has preserved wealth for our clients in the face of recent weakness of the Naira occasioned by the pandemic as oil prices are crashing. Also, our mutual funds (money market, and milestone funds) have given clients access to professional management of their assets in an inflationary period when their real purchasing power has deteriorated.
“ I advise investors to engage professionals who have strong understanding of the impacts of COVID-19 on the global economy and financial markets. This will enhance their ability to take advantage of the resurgence in markets that will come.”, Wale Agbeyangi, Group Managing Director, Cordros Capital Limited told The Kernel yesterday.
Corroborating him, the Chief Executive Officer, CardinalStone Securities Limited, Elile Olutimayin, explained that due to relentless efforts of the top Dealing Member Firms to penetrate local investors, domestic participation on The Exchange had outpaced foreign ones.
“ To put it in context, domestic participation in the bourse as of April 2020 according to The NSE was 59% while foreign participation accounted for 41% of the total transactions (4-month low). When you take a deep dive into the makeup of the domestic participation, retail investors account for 54% while local institutional investors account for 46%. I have coined this year, the year of the locals.
“ We are sticking to our strategy, though we have experienced some disruptions, given the current pandemic. Over the years, we have underestimated local participation in the market. But this year, we are beginning to see our local investors rise to the occasion, bolstered by the current low-interest-rate environment. We are seeing an increasing interest of locals in the market from investors who have not looked the way of the capital market since 2008. When you compare just dividend earnings alone from some fundamentally sound tickers on the bourse with the current rate on money market instruments, it makes a compelling case for an investor to pitch their tent with the stock market.
“ Investors should be cautiously optimistic. These are truly unprecedented times and so the market would continue to be characterized by increasing volatility. They should obtain professional advice and stay close to their investments. They should ensure diversification of portfolios. Nigeria’s economy is threatened by coronavirus pandemic, falling oil prices and demand shock. However, some stocks are obvious winners even in these time. For instance, the technology and communication companies.”, said Olutimayin.
The Chief Executive Officer, Chaple Hill Denham Securities Limited, Mr Akeem Shadare explained that apart from customer engagement, application of technology would always globalize the market, enhance transaction on the bourse and reinforce investor confidence.
According to him, the ease with which The Exchange transited to full virtual trading really encouraged global and domestic investors. Shadare also noted that investment in the capital market requires sustained research in order to meet expectations of clients in the areas of quality companies with track records of high cash flows.
“ We believe that customer engagement is a key factor. We deploy relevant technology and do a lot of research. These enable us to invest our clients’ money in high quality companies and those with cash flows like banks with long Dollar positions. We also assist them to invest in telecommunications and agriculture companies.”, Shadare said
On his own part, the Chief Executive Officer, Nigerian International Securities Limited (NISL), Laolu Martins underscored the essence of providing timely and accurate information for clients to aid investment decision.
“ The consistent performance of our company is due to our conscious pursuit of corporate promise: To transact business on the most professional and transparent basis, leveraging our state of the art ICT infrastructure – NISL Pro Trader, and ensuring that our clientele enjoys services delivered in line with global best practices.
“ The two main attributes we believe that have always helped us attract new clients and repeat business are professional activities of our strong relationship management and research team as they continually aim at meeting our clients’ needs. Also, as a matter of corporate policy, we constantly provide correct, timely, relevant and value adding reports that guide our clients in making good and prompt investment decisions. Investors should continue to buy fundamentally sound stocks with dividend paying track record and potential to outperform the overall equities market during rebound. A long term portfolio should consist of a well- blended equities with a touch of Eurobonds and other safe haven assets”. Martins maintained.
Speaking with The Kernel, the Chief Executive Officer, Morgan Capital Securities Limited, Mr Muyiwa Adeyemi, whose company is renowned for driving high volume of transaction on the market also attributed the feat to customer care policy.
“ I ascribe our continued success to first and foremost God Almighty and then our customer-centric approach to work. No doubt the COVID-19 pandemic will have a negative effect on our market just like every other sphere of our lives. The face of business has changed forever. But customers come first in all our decisions and we have given our clients all the confidence needed to always come back.
“ Investors should have a long-term view of of the market. Cash is king. And so, near-cash investments and a long term projection with more dividend and interest expectation apart from capital appreciation will always put smiles on the faces of investors.“, Adeyemi said.