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Strict measures will strengthen capital market, Dipo Williams

Following the recent listing of companies in the market capitalisation of equities, some experts are beginning to see light at the end of the tunnel.

Williams: It’s always easy to destroy but difficult to rebuild.

Dipo Williams, the immediate past President of the Chartered Institute of Stockbrokers said despite all the turbulent periods experienced by investors in the stock market, various steps are being taken by SEC and other regulatory bodies that will engender confidence in the market saying it will soon bounce back stronger. In this interview, with Saturday Vanguard, he bares his mind on other issues relating to the development of the sector. Excerpts.

Since the recent meltdown, has there been any significant improvement in the stock market?
Well, I wouldn’t say there is no improvement because if you look at things few months ago, you will know that things have changed. I believe we have had some improvements, but it is just that they have not been permanent. You see it’s always easy to destroy but difficult to rebuild. With the way things are, and if we have to keep the trend now, I think we might be seeing a permanent light at the end of the tunnel.
I believe that anything that is going to end up well must be turbulent and I believe we’re going through that turbulent period and very soon, we’ll get to the Promised Land.

Let’s give kudos to the regulators, they are trying to put things back in shape and we, the operators too are trying our best because virtually the regulators and the operators are feeling the pinch. Nobody is exempted.

We heard about the share buy-back policy, is this part of the measures to revatalise the market?
Quite frankly the buy-back rule has not been there, and SEC is still working on it.  They have not release how it is going to work and I guess they will soon conclude with the margin rule.  It means if there are rules, once you go into the market, you know these are the rules, but if there are no rules, the other party can hold you to ransom.  So, SEC is working on all these and all the rules will be clearly stated. I know that some bodies will have roles to play to ensure compliance to the set rules, so that when each party plays its role, there will be no cry from any other party.

Do you think SEC’s guidelines and the buy-back policy when released will ensure confidence in the market?
It is not the buy-back alone.  There are other measures and guidelines they are working on.  We actually need a combination of solutions. AMCON was supposed to come and mop up public asset. It is more like something we’ve been looking forward to.

You know there was a time we were talking about market-maker, but the problem was that there was no guideline. And the so called market-makers then were not really making any market because a market-maker is supposed to perform some roles to make sure that stock will never go down. Instead of going down, you do a mop-up and hold on to it. At the appropriate time when the market stabilises, you push it in gradually. That’s the same thing AMCON is coming to do. They are coming to mop-up all these toxins.  This will ensure that the market stabilises. But we’re not saying that everyday it will keep going up.  No, otherwise we go back to the old problem. Obviously, it goes up and sometimes it goes down and that’s the market.

So, would you blame it on lack of professionalism and inability to prepare for the ‘dark days’?
It’s not. Incidentally what happened is global.  But surely, it has a different dimension on global level. Everybody had a role in what happened. And that was exactly what the then Vice President now the President realised when we started encountering this problem in 2008.  So, we had to meet the leaders and explain to them what happened, and that we were all guilty – the investors, the operators, the regulators, CBN, everybody.

But we should find the way forward and not continue to apportion blames on anybody.  The banking sector has been doing that through the CBN, rolling out different measures and policies.  But I will tell you, if they protect the banks alone, they have not solved the problem because the banks are not playing within themselves alone. They can’t play within themselves. They need other sectors as just as those sectors also need them.

It’s still this market, they are bringing back the money. We started this market until government took over and fine-tuned it. Thank God for that. Those involved should come out with sincerity of purpose to get things done the way it should be so that it will favour everybody.

But the rules have always been there…?
You see, we have all learnt our lessons – the regulators, investors and operators. Of course the regulators are putting tight screw now.  Some of those things people do before and go Scot free will no longer be pardoned, except it’s proven that it is a genuine error.

The truth remains that from the onset, the rules have always been there like you said, but some people jumped the rules and some through favouritism and man-know-man overlooked the rules until it became a problem to the system. So, now that we want zero tolerance of the problem, we’re now trying as much as possible to make sure that we comply with the rules. The rules have always been there, it is just that our application of the rules is always the problem.

Would you advocate for government’s intervention in order to strengthen the rules?
Yes, even the government is asking for that. It’s only when you open up and when there is competition that you see people bringing out excellent ideas to stay in the market.  Monopoly has not helped any business any where in the world.  If you monopolise something, you have only succeeded in a demi-god in that area.

For instance, look at the power problem, if there are options and I have my money, I can choose the options available. If Mr. A is not giving me what I want, then I go for Mr. B. I should be able to choose how I spend my money, not somebody forcing me to choose where I will spend my money.

A lot of things we’re suffering today are because of the monopolistic attitude government itself have created. So, if there is no monopoly, there will be good competition and that makes you strive harder to ensure that you sustain and maintain your invention.

So what I’m saying is that government should provide opportunities so that people will grow because when the opportunities are there. It will engender development.


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