Mr Olatunde Amolegbe, a well-versed financier of nearly three decades and Fellow of the Chartered Institute of Stockbrokers (CIS) was recently elected as the 11th president and chairman of Governing Council of the Institute. Amolegbe, managing director of Arthur Stevens Asset Management Limited, in this interview with OLUSHOLA BELLO, speaks on the stockbroking profession, his vision, the financial markets and economy generally.
Congratulations on your election as the president of CIS, what thoughts are upper most in your mind regarding repositioning the Institute?
As I have mentioned in most of my earlier interviews, the office of CIS president is a continuum, so I see it first and foremost, as an obligation to continue the good work laid down by my predecessor. Secondly, having been a principal officer in the last four years, I have definitely garnered sufficient experience to be able to construct an improved road-map which will be gradually unfolded in the coming weeks and months. We are taking CIS to the next level in all aspects; examinations, training and advocacy, but we also want to carry all our internal and external stakeholders along in everything we do. Another very important area is our pursuance of the Chartered Institute of Securities and Investment (CISI) Bill, which of recent, appears to have been grossly misunderstood by some of our partners in progress in the financial system. One of the reasons the Bill has not been finalised is that we deliberately, from the onset, made it a point of duty to carry all key stakeholder groups along in pursuance of the Bill, which in itself was painstakingly crafted in the best interest of the Nigerian Capital Market and the economy. The reality is that, for the lofty intentions of the original CIS Act to be achieved today, there is need to update its provisions holistically, bearing in mind also the general state of development of the Nigerian Capital Market and economy. Economic and market advocacy is generally a priority area for my team.
How has the COVID-19 pandemic changed the operations of stockbrokers and what has been its impact so far?
The first benefit of the current situation is that everyone, brokers, investors, and regulators now accept that technology is the way of the future. It is inevitable that most of the innovations put in place now will have to be sustained even after COVID-19: issues like remote trading, e-payments, e-IPOs and so on will become the order of the day. At CIS we have gone full swing into online training, and similar innovations will soon be incorporated into our examinations. However, investment in technology can also be expensive, so we call on government and private organisations to support CIS with grants to help us keep pace with the rest of the world. Our CPD curriculum has already been reformatted to take into account the current realities while our members have stepped up their skill acquisition in the area of technology. Please note however that we had always been prepared for this type of situation, as evidenced by the seamless transition to total remote trading during the lock-down.
What can the Institute do to make the profession more attractive especially to the young ones?
Contrary to the impression that some sections of the financial ecosystem are trying to create, there has always been competition, and a healthy one at that, in the financial system, and even the Capital Market. The term ‘Securities and Investment’ is more definitive of the work of CIS members than ‘Stockbroking’; so, that is one area of misunderstanding that we have been trying to address. Even the narrow meaning that limits the scope to securities trading is in itself a very large, useful, and demanding area of the financial industry, especially when you consider the two markets, primary and secondary, and the gamut of fixed income, equity and derivative instruments together, which most lay people do not usually take note of.
Beyond that, what we are even letting the public know is the scope of Stockbroking, in the context of the CIS curriculum goes far beyond securities trading and this is attested to by the CIS Education curricula which covers virtually all areas of the securities and investment management business. It is an all-round investment management and advisory experience and Chartered Stockbrokers can function productively in various business sectors, including manufacturing, oil and gas, banking, academia, and even very much so, in government. So, we have been engaging the youths extensively, to the extent of even instituting a national capital market quiz completion and debate which are now very popular in our tertiary institutions. In addition, to enhance the propagation of information to the public effectively, we have instituted a scholarship programme for financial journalists in Nigeria.
Journalists have always been very dear to us and we see them as partners in progress as far as four capital market literacy drive is concerned.
The Nigerian Stock Exchange is being demutualized. What are the implications for the Exchange itself and other members of the capital market ecosystem?
Demutualization is another global trend that our market has to be part of, and so far, ASHON has done a very good job of representing the stockbroker community in the engagements with the Nigerian Stock Exchange. We believe that the arrangement is progressing well and our members will get a reasonably fair deal, through their dealing houses. Essentially, demutualization will enhance the operational efficiency of the Exchange itself and enable greater degree of business expansion, which should ultimately benefit the dealing houses and their individual representatives. Post-demutualization we see The Exchange becoming nimble and introducing new and exciting product and services which will be traded by our members. This has the potential to create new income lines for them and also provide additional multiple investment outlets for the investing public. We look forward to this period with great expectations.
Based on the released corporate results and the existing economic headwinds, how do you see the outlook for the second half of the year?
You will recall that the economy recorded a slight positive growth in GDP in the first quarter of the year and subsequently nosedived into negative zone in the second. I think it is most likely the country will return to recession in the second half of the year, but that is due to the global realities of the COVID-19 pandemic. Virtually all countries have had their economies negatively impacted by the environmental situation, so it’s not peculiar to Nigeria. The lock-downs of the second quarter, coupled with the fact that the COVID-19 pandemic is still there, means economic performance will remain down facing in the second half of the year. Unemployment will worsen, inflation is likely to be slightly higher, and foreign exchange rate higher due to the situation with the oil market. The World Bank itself has predicted a worsened outlook for the rest of the year. However, we must remember that this is a global phenomenon. The critical action now should be to seize on the new opportunities that are emerging in the business world to position our organisations properly for the new world order. At CIS, just as we did during the last recession in 2017, we are already putting up a template to assist government with informed policy recommendations to return Nigeria back to growth at the shortest possible time. Our forthcoming National Workshop, like the last one held in Abuja in 2017 will substantially address this issue.
No doubt the difficult economic environment, compounded by the COVID-19 pandemic may further weaken low patronage of stock market by investors, what will be your advice to investors at the moment?
May I remind our friends in the investor community of the time-honoured rule of stock investment, which is ‘buy low and sell high’. I will add another famous quote for investors; “be greedy when others are fearful and fearful when others are greedy”. Clearly, and generally speaking, this is the time to buy, and discerning investors worldwide are doing just that. However, please remember to always s consult your stockbroker for proper investment advice. This is extremely crucial.
Where do you want to see the Institute at the end of your tenure?
I am positive that, by the grace of God, we will be able to take CIS to the next level. I will hope to leave behind a much more prosperous institute arising from the improved business profile and brand valuation that we are going to create in the next two years. When I was a youth, Stockbroking was the profession of choice for ambitious young Nigerians, and there is no reason why we cannot return to that situation before I hand over. The latent value of the profession is there, but we need to convince investors to shake off the fear they have held since the 2008 global episode. By the grace of God, we will get there.
Can Nigerian securities dealers trade in other markets apart from Nigeria?
Absolutely yes! Records are there to show that our members find it very easy to get relevant jobs when they relocate abroad. We have members operating in financial markets in Europe and the USA, among other places. The Chartered Institute for Securities and Investment in the United Kingdom (CISI UK) saw the highly quality of our members and decided to accept them into their Associate membership without further examination. We have strong working relationship with the CIIA in Switzerland also. So, generally, CIS membership is one of the best routes for any young Nigerian to forge an international career in the financial industry.