Mr Ariyo Olushekun is the Vice-Chairman/Chief Executive Officer Capital Assets Ltd, an investment banking outfit. A Chartered Accountant, Olushekun is also President of Chartered Institute of Stockbrokers (CIS), with over 26 years experience of active participation in the Nigerian capital market. He was recently appointed Chairman of the Capital Market Literacy Master Plan Committee set up by the Securities and Exchange Commission (SEC). He has also served in the Business Support Group of Vision 20:2020, the Federal Government Committee on Capital Market Resuscitation, etc. In conjunction with others, he facilitated the establishment of the Nigerian chapter of The Investment Club Network (TICN), a global organisation with representatives in about 30 countries. In this interview with The Economy, Olushekun bares his mind on Capital Market recovery, strategy to get reluctant companies to be listed on The Exchange, budget performance, state of Nigerian banks, among others. Excerpts: You were quoted as saying that the capital market is already on the path to recovery. What are some of the factors that will restore investors’ confidence? I think the Capital Market has recovered significantly. In the past 12 months, the market has moved steadily towards recovery. What has happened in recent weeks is a major test for the resilience of the market, to determine whether the market has actually recovered. We have seen investors taking profits in the last 4 to 6 weeks in their investments. It is normal that when a market has improved relatively, some would want to take profits, and so, they will try to sell. Whether the market is able to absorb such supply is the real test of recovery. I believe that our market has shown strength and resilience. Before the recent slight decline, the All-Share Index was hovering at around 40,000, but now we are at about 37,000. Despite all the pressure, what we have seen is a relatively little drop. The recent information is that the ratio of investors participating in the market is 50% foreign and 50% local. It shows that more people are returning to the market, and that’s good news. It also shows confidence. More investors are realising that there is opportunity to make money from the market again. To be modest, the market has almost recovered, may be not fully yet, but it has largely recovered. But many investors are still doubtful about the recovery rate of the market. What do you attribute to this? Most Investors are very much aware of the way the market works. They see the opportunities and most of them have returned to the market. The critical issue is this — is the market now policed enough? Can investments be safe? Does the market have room for Investors to make income, profit, capital gains or adequate returns? These are the issues that will inform the level of confidence. A lot has happened in these areas. We have seen some clean-up in the system, some reforms are still on-going. We have seen a lot of new things being done in the market. All these activities have given investors confidence to return to the market. How would the partnership with the New York Institute of Finance (NYIF) impact on the Chartered Institute of Stockbrokers (CIS), and by extension The Nigerian Stock Exchange (NSE)? Capacity building is essential to the development of stockbroking, the capital market, and the economy. Generally, this relationship will enhance capacity building of stockbrokers and other professionals in the capital market, not just in Nigeria or West African sub-region, but also across the whole of Africa. Also, it will enable professionals get world-class training that NYIF is renowned for. This will be delivered under more favourable terms in the sense that some of the programmes will be run here in Nigeria and other parts of Africa, hence, people would not need to travel to the USA. Of course, that reduces the costs. For instance, if the management of a company wants to send two or three of its workers to the New York for any of the courses, it can afford to send more people since there would be no travel costs. The programme will impact positively on the market generally. Are there plans of recapitalization of stockbroking firms? The Institute is not the right place to direct this question. Our opinion has been sought by SEC on recapitalization of stockbroking firms, and we have given our views. I believe SEC is working on it, and hopefully, it will make further consultations before making a pronouncement on the matter. What is your position? Our position is simply that SEC has, in the past, set up a committee made up of its senior officials, and various operators including The Exchange, Stockbrokers, Issuing houses, and other stakeholders in the market. We did extensive work and came up with a report. The main thing in the report is that recapitalization of stockbroking firms should be risk-based, it should be a function of the risk you are carrying, what level of services you would want to render and what risks are involved. This remains our position. It should not be a one-size-fits-all. Stockbrokers should be able to operate at different levels of the industry. What systems do you have in place to track budget performance so as to contribute to federal government policies? We have a technical committee that deals with such issues. The technical committee monitors the budget and makes inputs from time to time. In terms of contributing to economic policies, every year, the Institute organises a national workshop on the economy, where we invite policy makers from various sectors both public and private. Issues are discussed on various areas of the economy and the resolutions packaged and sent formally to the federal government and other arms of government where they are required for planning and budgeting. With this, we are able to provide a forum for discussing existing and new issues. The workshops have been successful and have provided us an opportunity to make contributions to the national budgeting process. What is the truth about the possible takeover of Wema Bank by AMCON? Wema Bank has refuted it. I don’t think there is any plan for AMCON to take over the bank. If a bank is going to be taken over, it is not what should be read in the newspapers ahead of the actual takeover; CBN or AMCON would need to move swiftly if they are to do that. That is what they did in the past. But they have not done that with respect to Wema Bank. People should be careful when they talk about things like this because it is enough to dent a bank’s image. Depositors become worried about their funds. Some may start moving their funds out of the bank. In any case, the CBN has stated several times that it will not allow any bank to fail. I think Wema Bank has been making positive efforts to raise capital. I have seen some investors put money in the bank. They are making serious efforts to position themselves well to compete in the banking industry. I don’t think Wema Bank is facing any trouble. Taxation is a major issue in Lagos State. What tax regime should be put in place to ensure a harmonious relationship between Lagos State government and the business community? I think Lagos State needs to soft-pedal on its aggressiveness in taxation drive. The government needs to understand that investors or businessmen that operate in the state also have their challenges. Some may decide to move to neighbouring states if they feel the pressure is too much on them. Most companies on Lagos Island are harassed every year by local government officials. One of the ridiculous things they come up with is to ask the companies to pay N50,000 because they have a TV set in their office. If you spend N50,000 as tax every year for owning a TV, how much did you buy the TV in the first place? Is it a bad thing to have a TV in the office? And if you say the amount is the duty or rate or whatever, there are residential houses in the same area and the residents also have TVs, but they don’t pay N50,000. The companies are told that they are being asked to pay because they can afford to pay. If taxation becomes excessive, it works against the business. It drives people out of the state. We have to be careful. Government is not expected to over-tax the people. The important thing is to create the environment for business to thrive, and tax will come automatically. People would pay tax. Nobody should run away from tax, but it shouldn’t be too hard for them to pay. The impression is that every major thing that comes, you will pay for that separately. For instance, for the tolling of the Lekki Expressway or even the bridge between Lekki and Ikoyi, it takes only one minute to cross from one side to the other, and you will pay about N250 just for a minute drive. In any case, the bridge was built with taxpayers’ money. People pay tax so that they can enjoy basic infrastructure. Why should they pay separately for that infrastructure? Now that the government has bought back the concession on the Lekki Expressway from LCC. What is the role of The Investment Club of Nigeria (TICN)? The Investment Club of Nigeria is an initiative to encourage people to come together to contribute regularly some little amount of money and invest as a group. It also has the benefit of giving its members an opportunity to jointly analyze companies where they will make investments. Somebody carries out a research and presents the report to a meeting of all the members of the club. And everybody will come up with his own opinion, and jointly they will take investment decisions. The concept was introduced into the country some years ago, and I think it has achieved a lot of its objectives.
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