Onyema means well for stockbrokers on demutualization … Ezeagu

The Chief Executive, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, has been commended for his sustained effort at demutualizing the Exchange, the process described as tasking, lengthy and requires tact to accomplish.

The Chief Executive Officer, Solid Rock Securities Mr. Onyenwechukwu Ezeagu, in an interview with Daily Times said that the NSE under the leadership of Oscar Onyema has sustained effort at ensuring that all the barriers to turning the exchange into a public profit making company , are addressed to pave way for a rancor free demutualized exchange.

Ezeagu, also the chairman of the Association of Stockbroking Houses of Nigeria (ASHON), told Daily Times that NSE is addressing the challenges one after the other, of which the January 26th scheduled verification of members remains an integral part of the process which must be addressed before forging ahead.

According to him, there is process which has been set for the demoralization process to take and the NSE is keyed towards meeting the standards set and directing all energy towards the process that demutualization has to take.

“You have to remember that the CEO just said that the NSE is embarking on verification exercise and they have to know who and who are members of the Exchange before demutualization” Ezeagu said.

The Solid Rock CEO said that the verification exercise and other issues in the demutualization process made the NSE not to have summoned the Extraordinary General Meeting (EGM) which the CEO had earlier assured of during the 2016 Annual General Meeting (AGM) of the Exchange.

Ezeagu said “This issue of demutualization is not an easy task as the people think. There are lots of issues that need to be addressed and there are also cross section of stakeholders that need to buy into it, so the process is long and demanding”
He said that the NSE cannot address all the issues arising from demutualization in one clean, hence some segments could feel otherwise and thwart the process through litigation, “because once there is a litigation, it would take the process backwards”.
Speaking on the expected post demutualization status of stockbrokers who failed to qualify for the new capital base as well as the minimum operating standard.

“You will know that there is a difference between ownership and dealership, if you did not qualify for the dealership of the exchange that does not mean you have lost your equity contributions to the exchange” Onyenwechukwu Ezeagu said “That you are no more trading or that you did not qualify based on the minimum operating standards, does not disqualify you, what matters is the cutoff date, if you meet the cutoff date that means you will benefit from the enterprise”

Commenting on the expected impact of the capital market in infrastructure development, the ASHON Chairman said even as there is a federal government savings scheme that is expected to be unveiled soon, effort should be made to tie every bond to specific project.
“My concern here is that the scheme or bond should be project specific so that the project will generate money to pay itself. We don’t want a situation where the government will just float bond and use the money anyhow”

He said that tying bonds to infrastructures, ensures that the debt instruments would be self-sustaining and that investors who would invest in the instruments would enjoy their investment benefits as well as the impact of their investment on economic development.
“We want a situation whereby we can identify specific infrastructures deficiencies in the system, we then target to develop the infrastructures and raise project specific bonds to address them”