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Nigeria’s capital market: Past, present and future – 1

By Dele Sobowale
“In times of victory, prophets are unnecessary distractions”.
Trevor Roper, in The Last Days of Hitler.


The former Director General of the Nigeria Stock Exchange, Dr Ndi-Onyiuke, was supposed to be charged last week, in Lagos, for embezzling, along with others, N3 billion. Her lawyers are still doing what lawyers do best – they are stalling the trial.

There might be a historical parallel between the fate of this wonderful woman and her rise to power and the sudden fall and that of Adolf Hitler, 1899-1945. They were unraveled when and where they least expected – Hitler at the Battle of Stalingrad, 1942-43, and the DG in 2008 when the share prices reached their zenith before the relentless decline took over.

Yet, there were warnings; gleefully ignored by the tragic hero and heroine, which might have saved them the pain of their “last days”. Today, bank shares which were eagerly grabbed up at N28 per share, go begging for N2 per share; some, like Oceanic, have disappeared from the capital market.

So, prediction number one. If you are 55 or over, it is most unlikely that the shares you eagerly bought at N25, N30 or even N40 in 2008 will ever reach that price level before the curtain call. It is also unlikely that the lady I once called Madam Obama will ever return to the NSE, and if she does, it will be akin to returning to a magnificent castle one left abruptly only to find it in ruins. Yet, she and other investors were warned -right on this page. Please follow me down memory lane.

In two articles published in August and December 2008, the relentless decline of share prices on the NSE had been predicted; so had the ultimate fall of its DG. The first article was titled NIGERIAN FRAUD EXCHANGE, but the then Sunday Editor changed the title to NIGERIAN STOCK EXCHANGE (because he is not an Area Boy and does not see as clearly as we do).

That dealt with the capital market itself and the misdemeanors, as well as major crimes being perpetrated in the name of running a capital market. The second titled “WHEN GENIUS FAILS” was all about the DG-NSE; and apart from reminding her of an earlier call for her to voluntarily quit, in October of the same year, pointedly warned her that her exit, when it comes, will constitute a fall from power instead of a dignified resignation.

Can any reasonable person fault those predictions or deny their accuracy today? However, the point of this series of columns is not to gloat, but to again warn investors in the Nigerian capital market. The first warning is: DON’T

At UniJankara, we operate on the Henry Clay, 1777-1852, principle, “I had rather be right than be President”. You will get the truth here, (or call me for advice) – all the time. If you have shares now; forget them for a long time. That is the message.

But, just in case you think this is a flash of imagination, let me bring to your notice summaries of the two articles mentioned above. They were based on personal investigation, a fact finding – long before the Freedom of Information, Act. There are area boys everywhere – and I mean everywhere.

The following is lifted verbatim from the “NIGERIAN STOCK [FRAUD? EXCHANGE.


“Hi Emir, Stock Market shed a record of N3 trillion to the” bear run” as reported by Sanya Oni, THE NATION Tue 23-09-08. Kindly, comment on Sunday. Regards.”


Of all the assignments that I have been given this year by our readers, none gave me as much pain as the one on banks; which is just nearing conclusion; at least on paper. The action continues off the pages of newspapers because the banks need to be cleansed.

Just as painful is this assignment given to me by this anonymous reader. The topic is clear enough and the concern is not only national but global. At least 28 million Nigerians own shares and for every bread winner, one should add three people depending on his financial well-being and all of a sudden you are talking about 112 million Nigerians whose fortunes are at stake in what should ordinarily be called the Nigerian Stock Exchange but is more like the Nigerian Fraud Exchange.

But before explaining why this otherwise honourable institution had been turned into a gambling casino where the odds are stacked against the small investor let me take you back some years.

First, we have heard some of the measures that government had proposed. Some are illegal; a few don’t go far enough and none addresses the underlying causes of the current problem which might render the measures useless.

The Central Bank is putting out N150 billion to help banks and investors; the Attorney-General is to send a circular to exempt certain individuals from obligations under the Companies and Allied Matters Act, CAMA; a capital market stabilization fund is to be established among other means of intervention. The question is: will they work?” The answer, was, “not in the long run”.

After that, this second reminder was written under the title, WHEN GENIUS FAILS.

The title is not original to me. It was the title of a book by Roger Lowenstein who has also done a whale of a job on Warren Buffet, the latest richest man in America. Although how the global financial meltdown will affect the league table of the world’s richest people is still unknown.

But, the title appears to me perfect for the next series of articles on some of those who in the past appeared to have had the “Midas” touch. Midas was the mythical king who according to Hellenic fable was given the gift by Dionysius to turn everything he touched to gold.

But, as it happens quite frequently in the affairs of people, one day, the person suddenly loses the golden touch. Everything thereafter turns to dust.

In March of this year, I went to one of my best friends who is a keen player in the stock market, and, like a lot of others, had built up a pyramid of investment by using one set of securities as collateral for loans to buy others. As the share prices were going through the roof up till that time, he was getting richer —on paper.

If things continued that way they did he would soon become a billionaire. That exactly was the problem because when I saw him in March, I asked him to sell as many shares as he could to recover as much as possible of his investment”. I knew the market would crash; as it did that year].

When the upward escalator moving share prices first stopped in April this [2008] year, the Director General of the Nigerian Stock Exchange, DG-NSE, who deserves a great deal of the credit for the growth of the Exchange under her watch, reacted the way most people do when engaged in a game of musical chairs when the music suddenly stops -she was confused”. Little did Dr Ndi-Onyiuke know that she had just lost the Midas touch.


That was from 1999 to 2005. In small lots and huge amounts money vanished from every Federal Government Ministry or parastatal. READ THE BOOK. Forget WikkiLeaks. Read DeleLeaks. N5000 per copy.


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