The CEO of Stanbic IBTC Stockbrokers Limited, Mrs. Titi Ogungbesan, in this interview discussed issues affecting investors and other salient issues on the Nigerian capital market and the economy in general.
By Peter Egwuatu
THE Debt Management Office, DMO a few years ago appointed Stanbic IBTC Stockbrokers Ltd as the stockbroker to FGN Bonds and a key part of that mandate was to create awareness on retail bond trading in collaboration with stakeholders. What has been the response of the market since this appointment?
Market response has been positive and retail investors’ participation has improved over time. We expect further future improvement in the level of participation. Stanbic IBTC Stockbrokers Limited in its role as Stockbroker to FGN bonds has organised seminars/workshop in partnership with the DMO and the NSE aimed at creating more awareness amongst investors on the opportunities in the fixed income market.
There has been renewed passion for retail bond trading and we expect this to translate into more transactions on the floor of the NSE.
The appointment of Stanbic IBTC Stockbrokers Limited by the Nigerian Stock Exchange as one of a ten-member list of market makers was in clear recognition of the company’s ability to deliver on its mandates. To what extent has this assignment helped in stabilizing the capital market?
Our role as a market maker is to correct price imbalances whenever the need arises as well as provide liquidity in stocks which will ultimately help the capital market. We also think that the introduction of Securities Lending product will aid market makers in performing their role effectively.
The current slowdown the Nigerian economy is experiencing has intensified the clamour to shift focus from an oil-led, public sector-dominated economy to a more sustainable private sector-driven and diversified economy. Such clamour resonated at your 7th Standard Bank West Africa Investors’ Conference. What will you consider as the key takeouts from last year’s conference?
The theme of our conference, held in February 2016 was unlocking Nigeria’s Potential…. “Growth through diversification” and this was particularly borne from our belief that diversification of government revenues away from oil will be a step in the right direction towards sustainable growth of the Nigerian economy.
We had various speakers during the conference that spoke in-depth about how vital it is for Nigeria as a nation to develop a more private-sector driven and diversified economy in order to attain real and sustainable economic growth and development. Proper alignment of fiscal and monetary policies is equally very important. We can see that there is still potential for the Nigerian capital market and the economy regardless of the near-term weak macro-economic outlook.
We frequently hear about Nigeria’s potential and limitless opportunities for investment. Given the current situation, and perhaps with the long-term in mind, what specific areas of the economy will you be advising investors to tap into?
We think asset classes exposed to Nigeria’s infrastructure and agriculture sectors offers good investment potential. Nigeria’s high infrastructural deficit and the underutilised capacity in agriculture is a supportive catalyst that could underpin growth in the medium term
. We believe that with the 28 per cent of the N7.29 trillion 2017 budget that is billed for capital projects which infrastructure forms a major part of, the state of infrastructure should start improving moderately. Nevertheless, we acknowledge the poor level of execution of capital budgets in the past and the low capacity to execute. That is the reason why the engagement of the government with the private sector is welcome and encouraging and could result in a faster pace of closing the infrastructural gap. The development of infrastructure such as electricity, railway transport and more road networks should unlock opportunities in sectors such as agriculture and manufacturing. Given our population, the country is a ready market for a number of the finished goods so the export market should not be an immediate concern.