By Udeme Ekwere

Wednesday, 9 Feb 2011

Stockbrokers in the Nigerian capital market have kicked against the Securities and Exchange Commission’s plan to reduce the number of strockbroking firms through consolidation.

The stockbrokers, who spoke in separate interviews with our correspondent on Tuesday, said there were more pressing issues that must be addressed in the market, adding that consolidation was the least important issue in the market for now.

The Vice-President, Association of Stockbroking Houses of Nigeria, Mr. Emeka Madubuike, said stockbrokers should have been duly contacted on the issue, adding that it was not right for such information to reach brokers on the pages of newspapers.

He said, “I was really surprised to learn of that issue, and like other brokers, I just saw the information on the pages of the papers on Tuesday, and I can tell you that this is the first time I am getting that information.

“I do not have all the details about the consolidation. I do not know what form it will take, or when it will be done. But my opinion is that we should have been contacted before such an information went to press. Even when the banks had to consolidate, they were called together and the matter was discussed. I do not think that they had to read about it in the papers.”

Madubuike, who is also the Managing Director, Compass Investment and Securities Limited, added that SEC should have had an in-house discussion with the Nigerian Stock Exchange and market operators before disclosing the outcome of the issue to the press.

The Managing Director, Ideal Securities Limited, Mr. George Okafor, said consolidation was not necessary.

He noted that the SEC, NSE and other market regulators were avoiding issues that needed to be addressed and focusing on issues that were less important.

He said, “Consolidation is not the issue in the market right now. What the regulators need to do is to find a lasting solution to the crisis rocking the market currently. We can see that the market has been recording steady decline in the past two weeks, and this should bother them.

“If I am a broker, and you are a broker, my business is not affected by yours, there is enough ground to play on. We should not be embarking on consolidation for consolidation sake, or because some other countries are doing it. It should depend on our own peculiar practice and culture.”

The Director-General, SEC, Ms. Arunma Oteh, on Monday, said the regulatory agency was working on reducing the number of stockbrokers from more than 300 to a manageable size, adding that this was part of SEC’s effort towards sanitising the capital market.

Source: Punch