I sincerely hope that we are all seeing the rumblings at FBN Holdings, where the big boys are playing Russian roulette, and the rest of us are watching.
I want to keep a safe distance from the kiti kata that is happening at FBN Holdings but also refer you to Ijeoma Nwogwugwu’s brilliant essay on the matter
Please rush to the back page of today’s Thisday and read the most brilliant and dispassionate analysis of the Roforofo going on there.
But that episode more than strengthens my resolve to fight for the ethical sanctity of our market and to establish that the fight must go straight to the so-called regulators.
The market has over the years been beset with lax regulations both at the structural level and the human capital levels
We have seen a damming institutional weakness as a result of the above two debilitating reasons.
When the regulatory framework is weak, cowboys take over, and the weak suffer. Today, we are seeing cowboys dancing all around the market, pillaging and plundering at will with investors suffering.
The markets, as a result, are reeling in incestuous weakness with the indexes dancing at rock bottom with no real hope of a substantive resurgence
It is within this context that we are confronted with the monster, that is, FMDQ.
This firm has a leveraged institutional advantage to grow exponentially and now has begun to have expansionist ambitions
Carrying the debt markets almost up to 100%, it has today allegedly blocked out most players from two very lucrative windows – CP and Currency.
It also wields so many licenses, including the robust equity license, which allows it to play in that space.
Last week, it was announced that it was about to close a transaction that should see it lock down 2b shares of the premier depository in the market – the CSCS
Now, on the surface, we should clap abi cos there is nothing better than competition, but a quick cursory look will show you the role the CBN is playing in this growth.
Now, at its inception, I do not know what type of coffee they were drinking when CBN took a stake in the firm. Today, that stake stands at 16% or thereabouts, and this allows for the CBN Deputy Governor to sit on its board
Now, my people, you know say we no go school but elementary common sense will tell you that you can not play both sides effectively
It’s either you are a regulator or a player as you can not be both. Otherwise, what you will witness is what is happening with the FMDQ and the markets
Regulation will become compromised, and unfair practices and undeserved advantages will flow toward the favored son.
As it is today, it’s looking like the NGX is the poor cousin, systematically disadvantaged and forced by obtuse regulations to take positions inimical to its growth
Discussions at FMDQ show that they claim to have passed through one competition board or something, and I wonder how a board would okay a transaction that is clearly driving the institution toward monopolistic control of the markets.
The market is big enough for as many exchanges as we can have. We have millions of SMEs out there not listed, but nobody is going there.
It is the same old tired conglomerates with their low margins and huge turnover that everybody is feasting on
You move with institutional backing to trade CPs of huge conglomerates who in themselves are even struggling but refuse to curry the huge marketing potentials of the real sector as could be gleaned from the many start-ups who are raising billions offshore
The CBN, as a matter of urgency, must either divest from the FMDQ or also take up the same 16% stake in both the NGX and the NASD, failure which it must subject that portion of its operations to regulation by SEC
My people look closely at the market in the last 12 months, Dangote has come, MTN had come, Femi and Tony have had their day, and today, Oba Otudeko is dancing fuji.
Do you honestly believe that this is the time we should have funny regulations?
The Emefiele era of ‘na me na me’ has gone, and it seriously behooves the new management at the CBN to correct this anomaly.
This is the one that concerns me, and correcting it by divesting from FMDQ will go a long way in throwing more confidence into the space
Thank you
Duke of Shomolu
This article was sent in by Joseph Edgar aka “Duke of Shomolu”
Deep thought!