By Peter Egwuatu
Stockbrokers have expressed oncern over the operational guideline of the proposed Asset Management Company (AMC) now that it has been endorsed by the National Assembly.

The stockbrokers under the aegis of Association of Stockbroking Houses of Nigeria (ASHON) at its first Annual General Meeting (AGM) held recently in Lagos tasked its executive members to liaise with the appropriate authorities to ensure that the operational guideline of the AMC contains appropriate measures that will assist in addressing most of the margin loans associated with stock market transactions.

Speaking at the AGM, Chairman of ASHON, Alhaji Rasheed Yussuff, said its executive will engage the relevant authorities to ensure that stockbrokers interest are adequately taken care of in the operational guideline.

He said that ASHON’s accounts for the year ended 31 December 2009 show a surplus of N10.01 million, a decrease of N2.08 million or 17.23 per cent compared with the surplus of N12.10 million recorded in 2008.The decrease in operating surplus, he said was attributed to the increases level of activities in year 2009 compared to year 2008.

Subscription income however increased marginally during the year which is a reflection of the membership drive by staff of the Secretariat even though some members were unable to pay full annual subscription and still a large Member Houses are yet to pay.

According to him, “ The journey so far has been quite tasking in many ways. Prior to 2006 when the idea of the Association was first muted, the situation of stockbrokers was quite demeaning to the extent that no stakeholder group or individual took Stockbrokers serious by any standard.

There was no organized structure through which Stockbrokers canvassed their views even on matters that directly affect the business of Stockbroking and the Capital Market.

As a result Stockbrokers felt insecure and unprotected. This was amply demonstrated when the issue of recapitalization of Srockbroking Firms was introduced by the regulators. Stockbrokers were never consulted by the Nigerian Stock Exchange (NSE) or the Securities and Exchange Commission (SEC) and even other stakeholder groups within the financial services industry.

The existence of the stockbroking firms was threatened in the face regulation.The above background demanded total sacrifice, commitment, boundless and courage on the part of the team to ensure the young Association survived the pestilence both from within and outside that confronted the Association.”

While commenting on the economy, Yussuff said, “ The growth of the world economy in the turn of the new millennium was short lived as world crude oil prices crashed raising initial fears of possible economic depression around the globe. The shock which initially started in the US gradually moved to Europe and Asia. It then spread to the Middle East and finally hit the African continent in the first quarter of 2008, and that saw the unprecedented diminution in the value of stocks of quoted companies. “

He further noted that stock markets the world over came under a severe crash culminating to global financial meltdown which also affected other sectors like Mortgages, oil & Gas, Property, Manufacturing etc so much that most economies of the world witnessed significant slowdown in economic activities.

The US subprime mortgage lending crisis sparked of the credit squeeze as well as the crash in crude oil price were jointly responsible for the spiral global impact of the financial meltdown as most economies of the world depended on the black gold one way or the other.

The Nigerian Stock Market was reported to have been worst hit by the global financial meltdown, shedding about six trillion Naira (N6trillion) or about 80 per cent of its market capitalization in the process before a marginal rebound was witnessed in the first quarter of 2010. The market has since then recovered by about 30 per cent.”