INTERVIEW: “THE NIGERIAN CAPITAL MARKET IS BETTER RIGHT NOW AND WORTH INVESTING.” CONFIRM FROM THIS INTERVIEW WITH AN EXPERT IN THE MARKET.

(Lolia - August 30, 2017). Today, we have Mr Israel Osarumwense, a manager with AdonaiStockbrokers Limited, Lagos Island. Adonai Stockbrokers is a registered member of the Nigerian Securities and Exchange Commission, licensed to trade on the floor of the Nigerian Stock exchange.

In this interview, he’ll be talking about career, business and investment in the Nigerian capital market.

LOLIA: Good day Sir, how are you doing?

I’m doing great!

LOLIA: How are you enjoying your job?

When you are passionate about what you do. You can always get satisfaction. I’m passionate about what I do. You have to do what you are passionate about.

LOLIA: What is your company really into?

We are a financial institution into stock brokering, financial advisory services, investment opportunity management in the capital market – buying and selling of shares on customers’ behalf- asset management, securities, and the like.

LOLIA: How long has your company been in the market?

The company was licensed in 2003, but commenced operations in 2004. I joined the company in 2005. 

LOLIA: You were in the market before the recession and you are still there, why?Though the market experienced a boom when I joined, and later crashed. I’m still here because I’m passionate about my job. It’s my career and I have benefited from it. And as a pioneering staff, I have a lot to accomplish here.

My company on the other hand is still in the market because we have a good client base maintenance system. There is a place for continuity the company. Biz is all about continuity. Continuity is all about reviewing your strategies and policies, taking some vital decisions to diversify, which we did and that has helped to keep the business going.

LOLIA: How have you managed your affairs to remain in the market till date?Because a good number of portfolio management firms had gone under.

We have a large number of client base and we are not really open to margin account. A margin is a loan given to fund managers by banks or a credit facility given to portfolio managers. The portfolio/fund manager is expected to trade with the funds and pay a certain percentage as accrued interest.

Most fund managers went down because they were open to margin account. So, when the crisis came, they could not cope with interest rate at the end of the day.

The stock exchange law act does not really give a stock broking firm to give a certain returns to investors; most of these firms faulted the law by promising some investors a certain percentage as returns.

Portfolio managers manage investment in shares, securities, and others for clients, while Stock broking firms only trade stocks and shares for clients.  There are brokers and dealers.

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LOLIA: Is the market improving now?

Yes, yes, very fast and a lot of things are responsible. Before 2007, there are some factors: foreign investors are now back to the market. Investors involved in the money market have decided to come back to the market. The 2Q results of companies have been very impressive. The all share index has been up by 37.54% this year, 2017.

Zenith bank is a good example as well as other blue chip companies.

LOLIA: Is the improvement on the upward trend or it fluctuates?

It’s on the upward trend.

LOLIA: Are investors beginning to gain confidence in the market? Based on your   analysis, when do you think the market will get to the level it was before the              global recession?

The market has gotten to where it was before the global recession. As at August 18^th, the market capitalization was at 12,725,510,339.47 NGN.

E-dividend payment has helped investors to get their dividend paid on time, which

is one of the factors that has brought back confidence to the market.

LOLIA: This upward trend, how long has it been?

It has been around since March, which was the 1st quarter of this year.

LOLIA: There are individuals that earn a living through stock trading, are they still making something from the market?

Yes. They are involved in speculation. Investors that are doing trading are making something. Zenith bank paid 177 kobo and GTBank paid N175 kobo as dividend for the year 2016.   Zenith was N14 in March and now it’s N23.50 as at 23^rd August. Investors who traded had made money.

Information about the market is very key. Information matters a lot. Knowing when to buy and sell determines profitability. For instance Dangote traded N165 in November last year and is trading at N215 as at August 23rd.  This means, those that bought at N165 and sold at N215 have made good profit, couple with dividend already paid.

LOLIA: With I million naira, can I make a minimum of 100,000 from the market in the next one month?

Yes you can, but it depends on the type of investment you want to do. If you buy the right stock with the right information, you’ll make it.

LOLIA: How has your portfolio been in the past one month: is it on the increase or the way it has always been since the recession began?

It’s on the increase, because there has been inflow of capital. Prices have changed as a result of demand. Prices have gone up with the inflow of capital; the Market is bullish right now.  

LOLIA: How have you managed the portfolios of your clients during recession to control losses?

With no guaranteed returns to customers, as earlier mentioned, we are on the safe side. But, those who flaw the law were affected. They had problems managing their clients. They were expected to advise their clients to diversify into Treasury Bills and the like; the losses were not in some of those instruments.

When you spread your investment you will not make losses in all areas. Those with losses can use other areas to recoup their money. Treasury Bills are 90days, which is 3 months.  Investors’ returns come in 3 months. You don’t allow them put all their eggs in one basket.

LOLIA: How have the reactions from your clients been?

Some have up to date information, while others don’t. The informed ones were easy to manage. Someone bought shares in 2007 and sold in 2011 having a very huge loss.  Some bought shares that have been delisted and cannot be sold.

APCOM cannot compensate shareholders on delisted shares. The problem is from the acquisition banks; they did not absorb the liabilities totally. But there is still hope. When things are finally sorted out, the shareholders will be paid.

LOLIA: As a company, were there moments you thought about quitting the business?

Though there were some bad moments, but we never thought of quitting. The ability to trade to profitability is what makes the business. Though some companies downsized their workforce in the midst of the crisis, my company never did that. We only cut down pay and those that could not bear it left for other jobs.

LOLIA:  As an employee, how did you cope with the cut in your pay? The business environment is dynamic. There’s always need to make adjustments when necessary.

LOLIA: What are the factors that have kept you going in the business ever since the global recession started?

We have a good number of client base. We reviewed some policies to cope with the low turnover that was coming in, we diversified our business. For instance, we registered a Bureau De Change, which really helped us to cope greatly during the crisis.

LOLIA: If you are to start all over again, what would you do differently as a business? 

We would not employ as much as we did. Salary overhead was much.

LOLIA: What is the confidence level right now in the market?

It’s on the high side and still increasing.

LOLIA: Where do you see the market in the next 3 years?

It will go beyond 2008 market capitalization, because a lot of companies are being called to be listed on the floor. The likes of MTN are at the verge of being enlisted. Things will certainly improve.

LOLIA: Why should investors invest in the market right now and why should they trust you for good investment decision guide?

(a). Other Finance managers, like Pension fund managers are deploying some funds to the market.  Prices of stocks and shares are going up and there are other derivatives they can spread their investments on.

(b).We are: Trustworthy, Highly capitalized, stood the test of time, good human resource capability. We have a vast knowledge of the market. We are a people of integrity, no compromise.  In summary, an investment with us is secure.

LOLIA: What advice do you have for those still wanting to build a career in the capital market in the midst of the recession?

We are coming out. It has to do with your passion. If you are determined to build a career in the Capital Market, pursue it!  Life is all about dream. If you are dreaming to be an investment adviser, pursue it and assist people to build their wealth.

LOLIA: What advice do you have for the public?

Each time you want to invest, always insist on dealing with licensed brokers and fund managers. Try and understand why you should invest in a company.

LOLIA: Can you please tell us investors, at least 2 major things to consider in the market before investing right now in the capital market?

Check the profitability of the company and how consistent they are in paying dividend, bonuses, and so on.

Some people invest to become the board Chairman of a company. If you are in that category, look very well before you leap.

LOLIA: Is there any other thing you would like us to know?  

Deal with  registered companies; a lot of companies go about making promises of some returns on investment that are not real, just to collect money from people.

There was an incident that happened: I was trying to do inter-member transfer of account for a client. It was at the point of trying to transfer the account from C.S.C.S that I noticed an account was not even opened at all.

The supposed broker only opened an in-house account and gave the investor a statement of account which shows buy transaction of shares, but in the real sense the stocks/shares were not bought from the stock exchange floor.

Investors Beware!

LOLIA: Dear Investor,  what do you think?