BY MICHAEL EBOH
A financial expert and investment analyst, Dr. Martin Oluba, has lamented the inability of majority of the stockbroking firms to take advantage of the vast data and information at their disposal, a development he blamed on their Oluba, who is the President/Chief Executive Officer, ValueFronteira Limted stressed that lack of business analytics skills has accounted for the stagnancy and instability recorded in the Nigerian capital market over the years.

“As equity analysts,” he said, “Stockbrokers engage in rigorous research in order to meaningfully advise on more systematic investments in the equity market. Being a good stockbroker therefore demands the ability to convince people to invest and as a result, a stockbroking professional should possess razor sharp memory, analytical mind, logical thinking and a foresight to make wise projections.”

He continued, “Fortunately, many stockbroking firms sit on massive data that only require minimal additional analytic processing in order to produce the desired information as well as meet the ultimately desired insights for outperforming competition.

“Regrettably, however, while many of the firms are extremely data rich, they are very poor in the necessary market information and knowledge which ordinarily should be the collateral. The reason is simple; they lack the skills that are required to obtain this intelligence.

“Business Analytics comes handy to fill this gap. It equips the analytical stockbroking firm with the capacity to deliver on the above desired goals at minimal cost. The error of the past was that many Nigerian stockbroking firms relied on people with scientific research skills rather than analytics to help minimise unwarranted decision based on hunches and gut feelings.”

He blamed the inability of stockbroking firms to undertake proper research and analysis on an unfounded fear that using analytical tools requires the knowledge of statistics.  According to him, “Businesses operators find it more convenient to keep operational staff rather than analytical research or forecasting staff..”

He further stated that many companies do not think that they have the tools to get required data out of their systems. “Implied here is that they do not have the expertise or time to unleash their data and put it into a usable format in a timely manner that allows them to communicate decisions effectively,” he said.

According to Oluba, There is also management bias towards non quantitative decision making because: decision making based on thorough analytics eliminate the possibilities of internal politics that is cherished by many, while those who have spent several years in the business believe that they know all that needs to be known and can therefore, reliably depend on their gut feelings and intuition.

He also added that, “With huge spending on the establishment of sprawling research units, which merely conducted reporting rather than sophisticated and efficacious predictive analysis, the managers were disappointed.

“The resulting predictions are usually jaundiced by typical lags injected by research methodological approach. They always came too late for real time market advantage.

“Analytics is not synonymous with scientific research in a ‘strictly speaking’ sense.

The latter involves methodological approaches that inject unneeded lags and latency into decision making. Typically, scientific research requires the establishment and testing of hypothesis as well as many other controls such as the survey of literature where necessary.

“These stretch the time required for information, new knowledge and insights to emerge. The stockbroker does not need this time wasting and reporting which does not give him a clear market advantage.

“On the contrary, he needs immediate but wise and dependable decision based on data. Therefore with the predictive capabilities of analytics, he should be able to derive critical insights that will enable optimal trading and investment management outcomes.”