Mr. Oluwaseyi Abe, is the Chief Executive Officer of Magnartis Finance and Investments Limited. In this interview, Abe offers insights into current developments in the capital market, regulatory framework to market infractions, achievement of Chartered Institute of Stockbrokers, CIS among others. Excerpts:
By Peter Egwuatu
What can be done to encourage companies to list on the stock exchange?
We must accord priority to investor education with emphasis on the benefits of listing companies on the stock market. Investors must be educated on liquidity generation and risk-return trade-off. Also, there is a need to review listing fees across all platforms to make our stock market attractive and competitive. We must continually create healthy competition among our listed companies through innovative criteria such as corporate governance and shareholder value among others.
This will ginger the listed companies in the valley of indecision to brace up for outstanding performance. When the existing quoted companies are operating online optimally and meeting the expectation of their shareholders at least at the minimum, they will serve as beacons of hope to potential companies who shall take advantage of the benefits of listing to seek quotation on the stock market.
In the light of infractions in the market, what regulatory and enforcement frameworks have been put in place by the Chartered Institute of Stockbrokers, CIS as a Self a Regulatory Organization (SRO) to checkmate abuses and ensure professional integrity?
The CIS has disciplinary processes that ensure proper handling of erring members through fair hearing. This complements what is obtainable on the different platforms across the capital market space. All of SROs have zero tolerance for infractions because they are obligated to ensure investor confidence.
What is your opinion on the recent uproar on public debt and financing in the country?
It is the sure way to go. We must appreciate that the Federal Government has been able to bring down considerably the cost of local borrowings. This is good for the economy. We expect the Government to take advantage of the capital market to finance infrastructure projects. It had been done in the past and such opportunities always abound in the capital market. The market has potential to provide funds for long term projects.
You recently concluded your tenure as the President of the Chartered Institute and of Stockbrokers (CIS), what are the high points of your achievements? What are the challenges and what would you have done differently? What are your pieces of advice for your successor?
We have been able to refocus and reposition the institute greatly.We have returned the Institute into profitability though there is room for improvement. We got our Council’s approval to confirm Honourary Fellowship for four eminent Nigerians for the first time in the history of the Institute. Some Retired Army Generals are now part of us as stockbrokers under the Honourary Fellowship provision. At 25, the Institute acquired a befitting secretariat at highbrow Ikoyi area of Lagos. This is in spite of our challenging operating environment. We have also commenced the Specialised Professional Certification (SPC) to lessen our rigorous barrier for entry into stockbroking profession. This is in line with global best practices to encourage specialisation.
We have increased awareness through “Operation Catch them Young’ by partnering with tertiary institutions. We have recorded significant improvements in members’ participation in the Institute’s functions, an indication of renewed confidence. We have, re-launched the Nigerian Stockbroker Magazine. We have held successful national workshops that received Federal Government’s nod. With all humility, I can say we have done well. Our successes are also predicated on the support from all stakeholders. It is a collective effort and I have no doubt that my successor will keep the flag flying.
Where do you see stock broking in Nigeria in the medium to long term and how will the enlarged scope of Chartered Institute of Securities and Investment, CISI Bill impact the capital market?
CIS has built an enviable profile as a force to be reckoned with. Quite a lot of people are showing interest in our affairs. Going forward, we are now on a better pedestal to play our advocacy roles in the economy. The CISI Bill will unite all players and professionals in the entire financial market by putting everyone under the same monitoring radar. This will enhance cooperation and sanity in the market.
Our Savings Ratio in Nigeria is one of the lowest globally. What can we do to encourage savings and investments?
There should be more enlightenment on Savings and we professionals should be encouraged to create more financial products. .Government should improve on its financial inclusion activities across all strata of the economy to boost savings. This will have multiplier effects on our activities in the financial market.. There is no gain saying that there can be no investment without saving. Government should encourage savings culture through attractive fiscal and monetary policies.
What strategy is being put in place by the market operators to woo back investors into the market?
It is a multi-faceted approach: first, the investors must be educated that our market has recovered, and that current price swings are normal. The Nigerian Stock Exchange (NSE) must fashion out a policy that encourages the licensing of more stock broking firms to operate in the remote states and towns. Corporate governance at all levels must be significantly enhanced. Government also has a role to play in providing liquidity to stabilise the market. Finally, efforts should be stepped up to revitalise the primary market and promote new listings of local and foreign firms.