The creation of portfolios is key to anchoring the synergy between the capital market and the money market.
This was disclosed by the Group Managing Director, GT Holding Company (GTCo), Segun Agbaje when the financial institution was listing its shares on the Nigerian Exchange Limited after it transited to a Holding Company.
Agbaje explained that anchoring the synergy between the capital market and money market, stakeholders require many ways to do so. One of the easiest ways is to create portfolios with money market instruments or equities in it like the company is doing with its new structure.
What GTCo’s GMD is saying
Agbaje said, “I think we all got spooked after the financial crisis and so we have stopped doing margin loans and leverages, one to one.
“A good financial system must overcome challenges like that and find a way to do safe margin loans and hopefully we learnt something from the past and find a way to go back to doing that as there is no way a stock market can grow if it is only driven by people’s money and so we must find a way to design leverage again and put it back.
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“I think the reason we have missed the synergy is that a lot of asset management companies and a lot of investments are not being done on a portfolio basis and people are either investing in either money market or equities and the trick is to design portfolios that have the two (money market and capital market instruments) as regards to risk appetite that will determine the percentages you play with.”
What you should know
On Tuesday, one of Nigeria’s largest financial institutions, GTBank Plc, transited into a holding company (Holdco) structure from its commercial banking structure and listed its shares on the Nigerian Exchange Limited (NGX).
What this means
This means that GTBank Plc will now be referred to as Guaranty Trust Holding Company (GTCo) Plc to the investing community. Furthermore, the bank will adopt one-for-one share exchange ratio that will not reduce or impact the shareholding structure of the bank.
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Agbaje noted that the company was not oblivious of the current changes in the financial space and added that the transition, as well as its listing, was done to enhance growth share, value addition and achieve its long term goal of becoming one of the top five financial institutions in Africa.
Agbaje said the experience of trading on the NGX has been really good and noted that GTCo Plc is very excited about the opportunities that have opened up with this restructuring, particularly because diversifying its income base has always been a major priority.
The Chief Executive Officer, NGX, Temi Popoola, commended the board and management of GTCo Plc for its successful restructuring while adding that the NGX will continue to partner GTCo and other listed companies and issuers even as it continues to build a platform that allows listed companies, investors and other stakeholders to maximise value in the market.