Endorsement of a Functional Handbook for Financial Market Operators by the Stakeholders
By, Seye Adetunmbi
The relevance of a standard functional guidebook for operators and practitioners in the financial market cannot be over emphasized. In effect, facts, information and knowledge which are key to market development and growth. Information, no doubt, it is a significant ingredient of a perfect market. This is why one of the characteristic features of the stock market is that it is one of the examples of a typical perfect market. Fundamentally, information drives the market, it engenders efficiency and a competitive market. Knowledge also aids efficiency and facilitates professionalism. For instance, when an issuer or a client is adequately informed about the workings of the market, it makes service delivery timely and mutually beneficial to all parties concerned. It will surely impact on the timeline for the issuing process from mandate date to completion of the capital market issue and necessary returns are done accordingly. This is why technocrats, market players and all ranks of financial market practitioners hailed the initiative behind the publication of the book titled Financial Intermediation: Operations and Practice, authored by this writer. The book was proficiently packaged as a textbook and a practical guidebook for financial market operators and practitioners.
At the public presentation of the guidebook to the public on July 21st 2020, the Chairman of the book presentation, Dr. Alimi Abdul-Razaq, Chairman, Forte Upstream praised the author’s brilliant service to humanity in his opening remarks. He said: “The collage of pictures in the book brought back the memory of the capital market which I used to be part of and still a part of; the book shows how the market has grown and tries to establish pathways to the future. He remarked further: “The zoom presentation of the book was unique as the first online book presentation in our clime though the author is not a first-time publisher.”
The book reviewer, Bola Ajomale, Managing Director of National Association of Securities Dealers PLC described the book as a fantastic work on operational works in financial intermediation. “It is an excellently punctuated book, a great work in academic exercise and would be a wonderful addition to anyone’s library.” Also in the earlier review done by Tayo Shenbanjo, a licensed financial advisor and a compliance practitioner based in the United States, he wrote: “The book is a useful compendium for financial market operators, capital market professionals, and university students. It will also serve investors, portfolio managers, college professors, and government functionaries in the pursuit of financial knowledge and understanding.”
The investment banking guru and Chairman of ANAP Foundation, Atedo Peterside, wrote the foreword of the book. He was a Chief Guest of Honour at the book presentation and commented thus: “Seye comes across to me as a perfect gentleman. I am glad I wrote the foreword to the book which I read in-to-to. It is a combination of theory, practice and history of the capital market. I commend him for having the courage and commitment to doing this. I am proud to be associated with the book”.
The Director-General of the Securities and Exchange Commission (SEC), Alhaji Lamido Yuguda said: “I am really impressed with what I have read in the book, it is major contribution to the capital market Nigeria. I particularly like the section on securitisation because we have a lot of huge assets that can be securitized. This will address the dearth of securities which our pension funds and other portfolio mangers can invest in. We need to do a lot more in terms of bringing investors back to the market and create more awareness. I urge other professionals to share their experience too by writing books.”
The Chief Executive Officer of the Nigeria Stock Exchange, Oscar Onyema, said the book will fill a lot of vacuums that exist when we talk of the capital market in Nigeria. “Very apt that such experiences are documented in a book that many generations yet unborn will yet meet and find useful”.
In her distinct commentary during the book presentation, Ms Arunmah Oteh, of Oxford University and former Director-General of SEC in Nigeria, used the opportunity to bare out her thoughts on the Nigerian economy and the market. She said: “I am delighted to join you from Oxford today, thanks to technology. I must say that it is a timely book, coming out post the unprecedented global crisis. The crisis has turned back the hand of the clock on the global economy, on the African economy and on the Nigerian economy. With the extreme level of poverty in Nigeria and steep decline in 2020 in oil prices, it is no longer tenable for Nigeria to depend on fossil fuel for export revenue and its well-being. Especially because, our greatest resource is our people and the unique enterprise experience, and of course it is the capital market that unleashes this. Therefore, effort to diversify the economy has to be accelerated with a sense of urgency. The book will enable regulators, market participants, issuers, investors - retail and institutional to understand better the jewels and gems of the market. I believe that a vibrant domestic capital market will be at the epicenter for any nation that wants to build forward together. Nigeria must look for more innovative ways to generate resources for building forward together. The domestic capital market provides patient capital so that we can expand businesses, create new businesses and create jobs. It is also good for good governance, for meritocracy and appropriate capital allocation. I am absolutely excited by what this book will do for us and financial intermediation, because it can help to truly unleash the potential of our market. It is a book written by a veteran investment banker and stockbroker who understands the Nigerian economy from his wealth of experience garnered in the several positions he has held. I like the fact that he is a candid commentator on the Nigerian economy. He is the convener of the Capital Market Roundtable in Nigeria. In his humble's way, he talked about learning from others, but he has actually thought a lot of people over the years. I appreciate the author for talking about about democratisation of the Nigerian economy for the participation of an average Nigerian. The book will help retail investors to know what to look for in financial intermediaries, how to invest in the market and know their rights. As I have always said, the first line of defense for any investor is the investor’s knowledge; this is the most important risk management tool. The book also gives international investors a primer on Nigerian capital market and offers wise nuggets that will enable them to identify great opportunities that Nigeria has to offer. The author, Chief Seye Adetunmbi is a role model worthy of emulation for his humility, sense of community and his involvement in the church as evidenced in the way he has been honoured. I must appreciate his wife, Mrs Olabowale Adetunmbi, a distinguished lawyer and other family members for allowing the Nigerian capital to share him with you. Let me thank you for your service to the nation through the capital market, also through your writings that extend beyond the capital market; it covers culture, Nigerian economy, history and politics; you illuminate Nigeria for people within and outside world to appreciate. I look forward to a nation and society that will continue to benefit from your intellect and commitment to showcasing Nigerian capital market in Nigeria and Africa.”.
Chief Oladele Fajemirokun, a distinguished entrepreneur and the Chief Presenter of the book to the public said: “The book displays arrays of historical and empirical knowledge about the Nigeria securities markets. A number of activities I participated in and I still participate. I congratulate ‘Seye and urge him to commence work on the sequel. I am delighted to present and recommend this book to practitioners, investors and students”.
In his remarks, Senator Ibikunle Amosun the Chairman of the Senate Committee on Capital Market and one of the lead presenters for book said: “There is a problem in a nation where politicians are richer than the investors. If Nigeria is going to get it right as a nation, our capital market must be robust. This is why this kind of a unique book is the way to go and that the senate will always encourage initiatives like this.”
Dr. U. J. Itsueli, Chairman of Dubril Oil Limited and President of the Old Students Association of Christ School, Ado-Ekiti said: "I find the book very appropriate, it is a useful guide for navigating the market as a non-operator. The collage of pictures in it brings a lot of nostalgia. I congratulate Seye and I must say that I expect no less from him being an alumnus of Christ’s School".
Charles Iyore is quoted thus: “Congratulations Seye for demonstrating again the more important component of a stockbroker. A stockbroker is licensed to deal in securities on third party platforms or exchanges. The most important attribute of the broker, however, is his advisory role, his capacity to advise the investor, individual or corporate, on how to buys and sell securities in other sectors he is unfamiliar with…. If the economy is serious about growth, it must go back to appropriately engaging the broker/advisers, or forever remain in a vortex. While in an advisory role with the Nigerian Stock Exchange, we tried to build the brokers into names, (Seye Adetunmbi Inc. James John Inc.) through road shows and aggressive issuer programmes. That programme of individual incorporation would have been concluded, with our designated broker programme as a continuing in-plant programme for listed companies. There were diversions at the end and those errors have now come home to roost, with a capital market unable to drive economic growth. Seye, you have always demonstrated the ability to think outside the box, and this book is a testimony to your continuous and independent market analysis.”
Other comments on the book captured include: “Brilliant expository dissertation” - Ven L. L. Eso; “Another excellent and detailed book by Seye Adetunmbi. The book is good as a practitioner's guide and also as reference manual. A well-researched book to satisfy other professionals in the capital market. Well done” - Otunba Akin Osiyemi; “This is very good. It's like a reference manual text book personal account rolled into one. It may easily pass as a guide to investment banking in Nigeria. Kudos." – Bolade Oyebolu; “It is indeed a book on the theory and practice of financial intermediation with special reference to Nigeria. Full of practical examples and relevant historical details, it will be a useful handbook for students and experienced operators in the financial market.” – Banji Ogungbemi.
In all, Tayo Shenbanjo wrote to conclude his review of the book: “This is a beautiful exercise in trying to mesh a lot of topics together in one book. As a prolific author of other subject matters, one can only hope that he will do a follow-up with another good book in not too distant future. Senator Olubunmi Adetunmbi, while giving the vote of thanks during the book presentation to the public commended the publication as a milestone book which is well received by captains of the market particularly that the book was launched on the author’s birthday. To round-off the memorable event, the President of the Chartered Institute of Stockbrokers (CIS), Tunde Amolegbe led the family song of stockbrokers after saying: "Seye has demonstrated again has shown his multi-talented part, from being a floor-based stockbroker to an excellent capital market practitioner and now an author and a publisher. The accolades will keep coming and we your fans will be there to for you; we know the best is yet to come. Congratulations, it is a book we will like to recommend to our CIS students"
Let me state here that when I realised the need for a guidebook for the financial market operators after I joined the capital market in 1990, I started taking notes. It is a thing of joy that the book is now available on Amazon through this link https://www.amazon.com/dp/B08BNFHWN1/ref=nodl_ and some strategic sale outlets in Nigeria. An applied book like this one is unequivocally very good and strategic to the market. It complements the awareness scheme of the regulatory body, makes it easier for the investment bankers and stockbrokers to do their jobs while keeping the clients adequately informed on the workings of the market. In essence, it is a win-win situation for the tripartite market stakeholders – Clients, Operators and Regulators.
CHANGING THE STORY OF DEVALUATION IN NIGERIA
By
Seye Adetunmbi
The action of the CBN to devalue naira becomes inevitable due to the reality of the pressure on the national reserve towards meeting the federal balance of trade obligations. Many factors are responsible for the situation we find ourselves as a nation today. In the first instance Nigeria was far more productive in the 1980s when a dollar exchanged for less than 70 kobo than the prevailing situation in the present setting. Nigeria is no longer the net exporter of refined petroleum products as it used to be in the 1980s. As a matter of fact, the country has been importing all refined petroleum products we consume for years till now. At what point did we get it wrong and national fortune nosedived? Just imagine, Kwalipipe in Kano produced pipes for local use, toilets were fitted with WC produced in Kano and Abeokuta, the cylinders for the cooking LPG gas were produced at the NGC factory in Ibadan, the electricity generated used cables produced by the Nigerian Wire and Cable, Ibadan and Kablemetal in Lagos and Port Harcourt. What did the government or we as a nation do to increase capacity to meet increasing demand locally and not resort to importation?
The era of assembled cars, buses and trucks locally had gone with the winds. What happened to Peugeot cars in Kaduna, Volkswagen cars in Lagos, Leyland bus in Ibadan, ANAMCO bus in Enugu, and Steyr in Bauchi that was producing agricultural tractors for Nigerians?
The value chain of a vibrant vehicle assembly sector extended to the production of accessories and components of the automobile vehicles and tractors. For instance, Vono was producing the seats in Lagos, Exide produced the batteries in Ibadan and was serving the West Africa belt. Likewise, Isoglass and TSG produced the windshields in Ibadan; Ferodo produced the brake pads and discs in Ibadan; Tyres were produced by Dunlop in Lagos and Mitchelin in Port harcourt. These were tyres produced from indigenous rubber plantations within the country.
For many years, radio and television sets were assembled in Ibadan by Sanyo; refrigerators, freezers and air conditioners were produced by Thermocool. Nigerians were putting on clothes produced by UNTL textile mills in Kaduna and Chellarams in Lagos with cotton grown by Nigerian farmers. As little children and young adults, we used shoes and sandals produced by Bata and Lennards with locally tanned leather from Kano and Kaduna. I remember flying Nigerian Airways as a student from Ilorin to Kaduna with N15 or something. The airline flew to most places in the world and it was about the biggest in Africa at its peak.
Where did Nigeria miss the road? Virtually all kinds of foods are being imported to Nigeria until recently. The period we had a stable exchange rate, most of the food Nigerians ate were grown and produced locally.
The solution to the foreign exchange challenges in Nigeria today is a collective responsibility. The country needs a progressive and positive-purpose driven leadership to pilot the structured solution coupled with a strong political will.
The country needs to rejig the national policy on productivity drive. What are we producing now and what are we set or planning to produce that will be backed with measurable action.
The government must be fiscally disciplined. It becomes imperative to set out clear incentives for local resource-based manufacturing companies. This will be implemented with a combination of example setting and trade instruments. There is need for a deliberate national orientation structured to change the consumption culture of Nigerians. This is not just going to be about food but in all things, by consuming what Nigerians produce and shunning what we do not produce.
Of course, we must deploy our technocrats effectively and return to planning the Nigerian economy. The government needs not to control the commanding heights of the economy but provide incentives for activities in a well-structured manner to ensure rational input-output congruence.
If Nigeria determinedly can implement those things, and by extension invest more in technical education at all levels, encourage faster domestic capital formation, supplemented with foreign direct investments, things will look up and all other things being equal, the economy should be radically transformed within fifteen years.
We are talking about true transformation that will create more distinguished entrepreneurs of international standing. The story of Nigeria will change to looking for people to employ and the speculation in international circles will be when Nigeria will revalue its currency. This recurring devaluation will be historical footnotes. It is doable with persistent determination. The history of South Korea, China and India is a reference point. With sincere leadership committed to a vision that all well meaning Nigerians buy into, we will get there. This is the minimum expectation from the current government. I have no doubt in my mind, President Buhari is up to the task for the succeeding administrations to build on.
