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Thursday, December 19, 2013


…and tips to guide current and prospecting investors in the market

    My first encounter with Mrs. Ndidi Okereke Onyiuke (the former President of the Nigeria Stock Exchange) was on Monday 27th October, 2003 at MUSON centre Onikan Lagos during the awards presentation ceremony of the Nigerian Stock Exchange Annual national essay competition (2003) which I was one of those to be presented with awards in the university category. That was not the first time I knew of the woman and the power he was wielding as the President of the NSE, but it was the first time that I would sat very close to her and even shake hand with her. It is now ten years but my memory of her is still fresh as an iron lady of the exchange who many men fear and respect; built with huge body frame like many other powerful women of Africa and among the few women holding important public position as at that period in Nigeria. Her tenure at helm of affairs in Nigerian stock exchange started smoothly but later clouded by intrigues and controversies that were to characterize her final years as the head of the exchange. It was said of her that he was a power-hungry lady who control not only the Nigerian stock exchange but what was supposed to be the supervising agency of the exchange, the security and exchange commission (SEC) whose head Al Faki was rumored to be appointed to the chair at the instance of Mrs. Ndi Okereke. 

     One of the controversies that would later sink the career of Mrs. Ndi was the controversial raising of money for the election campaign of a PDP presidential candidate. Many Nigerian (at that time) accused her of delving into issue that was not her business at the expense of her official assignments in order to get favours from the Presidency. In the process of the fund raising, she used her influence on the exchange to ask for contributions from major companies and actors in the Nigerian private sector. Her fund raising jamborees took place on about two different occasions, before general elections to support the candidates of the ruling party, as well as fund raising activities for the election campaign of US President Barack Obama whose campaign office later denounced ever asking Mrs. Ndi to do so on their behalf. Unlike people holding similar position in other countries (take for example the US) who eschew from politics, Mrs. Ndi want to hold political relevance (at any cost) by dragging the exchange and her self into Nigeria’s murky political waters. At the end he had to pay the price of her naked desire for power and visibility, he was sacked out of her office by another lady who was in control of the Security and exchange commission. He was later to be accused of falsifying documents related to her education in the US and her claims of working at the New York stock exchange. Like many other Nigerian elites Ndi was busy chasing all kind of awards and honorary titles during those period, he was bestowed with professorship of entrepreneurship by University of Nigeria Nsukka, and traditional titles from traditional institutions.
   Ndi Okereke started working with the Nigerian stock exchange back in January 1983 during the civilian regime of Alhaji Shehu Shagari and some 27 yeas later she rose in rank to become the chief executive officer of the exchange during another civilian regime this time around of Olusegun Obasanjo. At the time she was appointed the head of the exchange she was fifty years old, an age that one could say she was at her prime and full of energy and experience to spear headed the needed reforms in the exchange. The controversies that followed the issue of lying about her academic qualifications and work in the US would later damage her reputation and image in the country. As condemnation came from all quarters and people asked the authorities concern to make sure they made a through investigation on any individual before appointing him to the highest position in the exchange. Another controversial issue that Mrs. Ndi was involved with was that of the Transcorp shares (a conglomerate created at the instance of the former President Obasanjo who wanted to create South Korea type Chaebol Companies in Nigeria) that acquired 75% of the shares of former National Telecom company NITEL. She was quizzed by EFCC because of the $750 million accusation of NITEL by Transcorp where she was the chairwoman. EFCC also quizzed her on the controversial raising of N100 million for Obama campaign; and when it was time for her to response to the arm load of criticism against her, she quipped “I want to make it clear that I am a Nigerian and I have the right to do anything I want with my time and my money”.

    Under her management the exchange reached the highest peak in its history and not long after sink to it lowest point. The spectacular rise in the fortune of the exchange was associated with the growth in the economy (partly contributed by the increased in price of crude oil in the international market), reforms introduced during her period and activities of speculators who were allowed to have their field day. Among the many reforms introduced by the big Madam of the exchange were computerizations of the activities of the exchange, strengthening of the all shares index, as well as her efforts at initiating the authorize clerkship examinations program for those working in the capital market. After the financial crisis of 2008/9 issues like that of poor corporate governance in the market and inadequate regulatory framework became prominent. The amount of portfolio investment that came from outside the country during her period was unprecedented in the history of the exchange making it one of the fastest growing in the world. All these help to boost the ego of Mrs. Ndi Okereke making her to acquire more powers and wrongly think she can do as she like. May be because of her large body frame some people (wrongly) mistake her for current finance minister Dr. Ngozi Okonjo-Iweala who is more clever in not showing (outward) her desire for power, which Mrs. Ndi cannot found way to cleverly hide away from public eyes.

   Unlike Mrs. Ndi, the US career record of Mr. Oscar is not much in doubt as he rose in his career in the US to level of senior Vice President and chief administration officer at American Stock Exchange (AMEX); with about 20 years working in the US financial markets and Nigerian IT industry. The process that led to the appointment of Mr. Oscar was very rigorous involving globally recognized bodies such as Accenture, Johannesburg Stock Exchange (JSE), and Council members of the NSE. He received his university education in both Nigeria and US. Now more than two and half years since he assumed office as head of the exchange Mr. Oscar has surely done well as the exchange has gotten back to its pre 2009 peak this year, thereby setting another record. But, before that was made possible he has to battle with some major challenges that were at the heart of the collapse of the market in 2008. The left over issue of margin loan is still not over, as the bad loans that resulted from that altercation is not cleared despite the intervention of Asset Management Company of Nigeria (AMCON). Recently, the performance of the exchange has gone down which some analysts blame on the activities of speculators. Issues that border on unethical practices of some major actors in the market are still part of the problems that Oscar has to work harder to solve.
       It is too early at this moment to compare him with Ndi who spent 10 years in that post and who also was a bit of an insider on the exchange, as she spent most of her working career there. While Ndi was in her early 50s when she assumed that position Oscar was in his early 40s. Both of them spent more than a decade living in the US, either studying or working. But, their approaches are a bit different, so far Oscar has keep to himself not showing off in front of the cameras or looking for too much publicity which was the hallmark of Ndi tenure at the exchange. As part of the ongoing reforms in the exchange listing rules were revised, introduction of Islamic share index as part of measures to diversified the exchange and attract more investments, market makers introduced, demutualization, as well as segmentation of the market. The fact that foreign investors (who own about 60% of the quoted companies on the exchange today) would come back quickly not long after they had left in hurry during the last crisis period that led to the crash of the market is testimony of the level of confidence these investors have on the current management of the exchange. This year alone the market has gone up 41% thanks to the activities of these foreign investors.
      Many analysts view the current position of the market as overvalued due (mostly) to the speculative actions of foreign portfolio investors; thus, putting words of caution here and there for new investors in the market. Unlike Mrs. Ndi who was distracted by loads of controversies outside her official engagement, Mr. Oscar seems to be focused on his job for now. The lost of confidence by the investment public on the leadership of Ndi Okereke did much damage to the performance of the exchange, and the same confidence they seem to show on the leadership of Oscar is affecting the exchange positively. The sober manner of Oscar which contrasts with ego boosting habits of Mrs. Ndi is good for the management of the exchange - which is very sensitive to not only external happenings but what is taken place internally. Thus, the need to put people who are very careful and watchful of their own actions and its effect on the performance of the market. Looking at the number of reforms currently being undertaken by the management of the market with view to improve performance and efficiency one feel optimistic about the future. But, caution should always be exercise to avoid unexpected surprises.