Busayo Akanro - Light does not shine in light

The regulatory authorities in the nation’s financial sector and the Federal Ministry of Finance yesterday met in Lagos with a resolve to jointly take measures to preserve and promote the continued vibrancy, liquidity and buoyancy of the capital market. The Finance Ministry, Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), Securities and Exchange Commission (SEC) and the Nigeria Stock Exchange (NSE), at a joint session in Lagos said they would not allow the stock market to crash.

The market has been on a bear run that has lasted for over three months, leading to an unprecedented depression and huge losses for individual and institutional investors. Since March this year, market capitalisation of the NSE dipped from a record level of over N13 trillion to N10.4 trillion last Wednesday before rallying Thursday and yesterday.

But Minister of State for Finance, Mr. Remi Babalola, said the nation’s capital market, when viewed from the point of what it should do, has done very well. (more…)

“I was just focused on every point,” he said. “It’s impossible to think too much. Just point by point. I didn’t want to think about the title.”……Nadal

LONDON - Rafael Nadal is no longer just the King of Clay. He’s the Wimbledon champion after beating the grass-court master of them all, Roger Federer, in a five-set epic that will go down as one of the tournament’s classics.

Nadal ended Federer’s five-year reign at the All England Club, holding off a stirring comeback by the champion from two sets down to prevail 6-4, 6-4, 6-7 (5), 6-7 (8), 9-7. He became the first man to win the French Open and Wimbledon in the same year since Bjorn Borg in 1980.

Nadal, the first Spaniard to win Wimbledon since Manolo Santana in 1966, avenged his losses to Federer in the last two finals here and snapped the Swiss star’s All England Club winning streak at 40 matches and overall grass-court run at 65.

The rain-delayed match ended in near darkness after 4 hours, 48 minutes of play - the longest singles final in Wimbledon history - when Federer slapped a forehand into the net on Nadal’s fourth match point and second of the game.

Nadal fell onto his back in exhilaration at the baseline. With his shirt caked with turf, he congratulated Federer and climbed into the players’ guest box to embrace his entourage. He had tears in his eyes as he grabbed a Spanish flag and walked across the television commentators’ booth to the edge of the Royal Box to shake hands with Prince Felipe and Princess Letizia of Spain. (more…)

160 different people who lived in 2 different cities where chosen at random to deliver a packet to a stockbroker who lived in a far away city. Each person was asked to write his/her name on the packet to a stock broker who lived in a far away city. Each person was asked to write his/her name on the packet and send it on to a friend or acquaintance who he or she thought would get the packet closer to the stock broker.

The idea was that when the packet finally arrived at the stockbroker’s, the names of those whose hands it passed through to get there would be known and confirmed in 5 or 6 steps. Half of these letters were delivered through 3 main people. These guys are called Connectors in the book “The Tipping Point” written by Malcolm Gladwell. (more…)

Last Friday, June 27, was a remarkable day in the lives of two eminent African leaders. On this day, our own Nelson Mandela celebrated his 90th birthday amid fanfare. A star-studded group of artists gathered at a giant concert in London, in support of his global AIDS 46664 campaign against HIV/AIDS, which was broadcast live around the globe. Performers at the event played to a crowd of 46,664 people, the same figure as Mandela‘s prison number at Robben Island where he was kept in captivity for 27 years. Though he was born on July 18, 1918, Mandela chose June 27 for the grand ceremony.

Tragically, on the same day, too, Mr. Robert Mugabe, 84, began his final journey to infamy by holding a controversial run-off election in which he was the only candidate standing. A week earlier, his main opposition, Mr. Morgan Tsvangirai, had pulled out his Movement for Democratic Change (MDC) from what he described as ”the violent, illegitimate sham of an election process.”
Since last year, stories about these two African leaders have been attracting media attention. (more…)

The current market jitters are centred on disturbances in the world’s credit markets. Worries about the viability of sub-prime mortgage lending have spread around the financial system, and the central banks have been forced to pump in billions of dollars to oil the wheels of lending. But what happened in previous financial crises, and what are the lessons for today?There have been a growing number of financial crises in the world, according to the International Monetary Fund (IMF). Among the key lessons of previous major financial crises are:

* Globalisation has increased the frequency and spread of financial crises, but not necessarily their severity

* Early intervention by central banks is more effective in limiting their spread than later moves

* It is difficult to tell at the time whether a financial crisis will have broader economic consequences

* Regulators often cannot keep up with the pace of financial innovation that may trigger a crisis. (more…)

“… for as long as the earth remaineth, seed time and harvest shall never cease…..”

Can you guess what the most popular discussion on Broad Street, Nigeria’s financial nerve centre was last week? Before you think too deeply, let me help you out. It was ‘Soludo’s Denial’. Can you imagine the Central Bank Governor denying that he instructed banks to stop margin facilities? He seemed to be saying that the banks only responded to a rumour. Even at that, can one blame the bankers? Is not ususally said that ‘in every rumour is an element of truth?’ If i can remind you, those that never believed the rumour of recapitalisation and acted promptly came out victorious. come to think of it; if the CBN never instructed or never thought of stopping margin facilities, why the sudden change of nomenclature and why ‘custody account? Is custody account not an existing instrument in the Nigerian market? So, why didn’t the Governor come out openly to tell the banks and thw whole nation that he never said so when the news hit the system even before the negative impact began to manifest.

Anyway, it’s very important in times like these for investors in the stock market to know and understand what it takes to be a winner in any market. There are a number of principles that are important to note with regards to investing in the market: (more…)

Hi Readers, history has just been written a few hours ago as members of the New Nigeria Club partook in an Investors’ Forum. The Forum was organised by the managers of NNC – Generis Solutions in conjunction with Realty Point Limited. Realty Point Limited represents Olive Real Estate – a real estate marketing firm in Dubai. The meeting kicked off in high spirits as expected as people poured in and grabbed available seats with apparent anticipation on their eager faces.

One could cut almost cut the thick feeling of great expectations with a knife in the Lagos Travel Inn hall where the forum held as potential NNC investors sat back and listened with rapt attention to the presentation done first by Deolu Akinyemi (MD/CEO Generis Solutions) and then Marcus Karin (Business Development Executive of Olive Real Estate). Yours sincerely was the most humble anchor of the program and very quickly made the audience comfortable by combining wits and humour to elicit laughter from them.

The investment opportunities that were on the plate were Shape-CD Africa and 10-Tower Jumeirah (Dubai). Deolu Akinyemi started by presenting Shape-CD Africa. (more…)

In a rare move, the Council of the Nigerian Stock Exchange on Monday imposed a freeze on the downward movement of stock prices that seemed to confirm regulators’ concerns about the consistent bearish trend in the market.

The significant price losses had been linked to the Central Bank of Nigeria’s directive to banks to suspend lending to support margin trading by stockbrokers and speculators.

Margin trading is the risky practice of using leverage or borrowed funds to invest in securities, which amplifies both gains and losses.

Unconfirmed estimates put the size of leverage in the stock market at 18 per cent or about N2.5tn, and this has been a significant factor in driving prices, especially in emerging markets.

It was learnt that the suspension, which resulted in the rather unusual scenario of 31 stocks gaining in price and none losing at the close of Monday’s trading, would be for one week in the first instance, while the NSE tries to persuade the CBN to rescind its decision. (more…)

Many investors in the Nigerian capital market are sulking and counting their losses. For quite a while now, the prices of shares in the market have been falling. The continuous drop in the prices of shares in a market that many have come to see as a cash cow is giving rise to fears that the market is heading for a crash.

For instance, a total of N650 billion have been lost by investors in the Nigerian Stock Exchange (NSE) in a matter of one month as the declining trend of the market indices and prices of equities continued for the fifth month on the Exchange. Market capitalisation which had a record of N12.640trillion on March 5th 2008 dropped to N10.95trillion at the end of the month of June a 13.5 per cent lose in prices and investment funds. (more…)

The Nigerian macro-economy overview is a compelling story of progression and advancement, attributable mostly to a stable political environment and the successful implementation of socio-economic and financial reforms. Though Nigeria has previously been extremely dependent on Oil & Gas revenues, recent statistics show a change in this trend. Militant unrests affecting oil producing regions have resulted in significant reductions in oil contribution to GDP. On the flip side, increasing focus on developing the non-oil sector, combined with growth in key sectors such as Telecoms and Building Construction have boosted non-oil sector earnings and growth.

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The significance sector is a key part of the financial services sector. In other emerging economies, it has been identified as being critical to the ability of those markets to grow and develop, simultaneously providing an opportunity to hedge against possible risks of private, social and economic investments. Insurance companies also serve as a base for collecting relatively small premiums from millions of policy holders, into a pool to support term financing for economic growth.
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A look at the growth patterns and trend of the insurance industry in various developing markets (we examined Brazil, Russia, India, China and Kazakhstan)< showed some underlying similarities; as well as other key factors, which have aided strong for the Insurance Sector in these countries.
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The Nigerian Insurance Industry has evolved over the past two years following the announcement of new capitalization requirements for companies operating the sector. With the conclusion of the consolidation exercise, the number of players dropped from 103 to 49. Activities in the sector have, however, noticeably increased; with enhanced public awareness of the sector and their operations, rapid expansion and strategic business acquisitions, improved visibility and strict supervisory regulation. (more…)