In this interview with PETER OBIORA Online Editor of Investadvocate, Olufemi Awoyemi , Capital Market Analyst and Founder/ Chief Executive Officer (CEO) of Proshare Nigeria Limited at the Company’s fifth (5th) anniversary reflected on its achievements so far, issues relating to the online publishing industry in Nigeria, impact of the firm in the development of the Nigerian capital market, the future of Proshare and other related issues: Excerpts.
Q: This is Proshares 5th anniversary, how has the journey been so far?.
It’s being very challenging, quite challenging, and it has also been educative as well. Educative in the sense that every step along the way has been one of learning new things, unlearning old paradigms and making new discoveries in terms of the work we have done, are doing and will have to do“ it’s a never ending cycle of innovation! Most importantly however, it has opened our eyes to a better side of the Nigerian economy. It has opened our eyes to the challenges small scale businesses face and the hurdles to building a virile SME driven economy“ most importantly, it has opened our eyes to the reality that ultimately, this country has a very good structural foundation and that if each and every one of us were to try as much as possible to do the best we can, we can have a very good country.
Lately we have had to go through a very difficult period where it appears as if the next day will not find you in a better position; but one has found out that somehow – as a a value-driven firm, we have seen the best and the worst of the Nigerian market; and there are still many ups and downs ahead for which our foundation can assist us to navigate. We are also very happy that we were alive and involved during one of the most challenging periods of the Nigerian Capital Market; and this experience we gather“ both good and bad during its downturn“ will prepare us for the days and years ahead.
We took some positions sometime back of which we have had a rethink based on new realities and the benefits of hindsight “ revealing to us that we have a higher than average understanding of trends, market dynamics and the changing landscape. The February 2009 NCM report, of which you were a part of confirms this. We have gone back to learn what we think made us to go off the mark, and we ultimately came down to the fact that we have had very few experiences of downturns of such severity in the Nigerian Market and this learning opportunity provides the shaping of the New Market and we consider ourselves privileged but well positioned to add value to the emerging market.
So far, it is a good start, five (5) years is just a start. In Nigeria , I think very few businesses get to reach five years“ given the business mortality rate we have seen; and even when you reach five years, you still have so much ahead of you that you may not even get to be 10 years. Far beyond the question of value and relevance, I think we have an incredible quality in terms of the over 25 members of staff working at Proshare, who now do not even need the direction of the Chief Executive Officer (CEO) to understand and interpret our reason for being.
Our people have a feeling and understanding of the Market they are serving; so they can think of innovation, adaptability and flexibility of being able to change, anticipate the next curve and provide the right services that meets the markets needs. As I get to play less and less a role in the running of our daily activity, I appreciate the time available to me to help develop some other aspect of the business that requires development, change and a little bit of advocacy.
Q: What are the challenges for Proshare?
I think that has to do with how we got started. We got started with the clear understanding that the market was about to go into a boom with some structural challenges in terms of the regulatory environment and so we understood that the boom may end up becoming a bubble and since bubbles don’t last we knew that a service was required to act as a bridge in the ensuing confidence gap that will ensue.
It was clear, and most importantly, we had access to inside information on what was happening enough to know where the market was headed. Increasingly, it became apparent to us that operators will not be in a position to do those things they were doing before and you felt that someone had to act; and frustratingly we could not until a more responsible regulator took over and took action that caught everyone including ourselves off-guard. We responded with the “Bull in the China Shops and engaged the regulators directly and this afforded us insight into facts that were not publicly available. This was in part, what we thought will happen in the first three years of our existence, bit not at the speed and impact of what happened in our clime which has now been proving to have been good judgment by those in charge.
As a firm, we made a tactical maneuver Prior to bring in a core Technical Analyst, as the head Analyst because the Market had being driven purely from an hypothetical situation, as people were not relying on technical analysis and fundamental analysis to take decision but based on a herd mentality; fuelled by the media and almost everyone with a few voices of cautions.
Sadly, the role played by the media worked out to re-inforce our traditional pessimism“ and fired our resolve to play a role in applying general best practice financial journalistic practices to what was evolving and this perhaps ensured our survival over our previous business model.
For us I think it is a benefit that we are relatively small, closely knit and operate on a significant but relatively lower budget than the market opportunities provided. We hadf a lucky break along the way with a key client rewarding us for our good work in resolving their firms case and that helped us overcome other pressures that were might have been subjected to.
Thus, a combination of factors worked for us and in the beginning of 2008, we knew clearly that we were going towards the end of the market; so we started preparing to rebuild the company for the challenges we saw ahead. Some nights, we honestly wished we were not in the position we found ourselves and had to constantly change strategies and emphasis. For example we changed entirely away from the News and Investigations; we stopped and slowed down on our Share Support Service, because they are not going to be relevant to the New Market.
However, we knew that the News and Share Support Service will be irrelevant for the time but still knew they were important and a trade-off had to be established. We resolved to focus on our advocacy role to establish relevance and be an active player in the market that was to come given our passion for the market. We actively engaged in the debate over the leadership changes that was to ensue and nearly got our fingers burnt up till the time certain disclosures came to our attention; yet the fervour was alive and there was no pulling back. As the CEO, this was my most trying period because it was not just about me or my beliefs anymore it was about the collective and I remain grateful to those that stood up to the challenge at a great cost, I would imagine.
Expatiate on Proshare’s hindsight on the Nigerian Economy
Simple statistics can show you that you have more foreigners coming into Nigeria now than ever before. We have more interest from people worldwide seeking to do business with Nigeria . The areas of their interest can be narrowed to about eight sectors or so, and which shows you that from every available data this country has a potential of being a very key development-driven nation.
Nigeria’s challenge must be the how, when and how it delivers on the potentials it has been blessed with.
How does it distribute the wealth and its income to make sure that the public sector officials use it equitably to engender infrastructural growth and also create jobs, bridge its huge growing unemployment gap, deal with its challenges in its educational and health sectors and the new threat of insecurity.
Having said that, all those risk can be giving a weight, and you will still find that Nigeria is okay. As it relates to some of us the challenge has always been about the wealth trickling down effect? how do we use the creative distributive network of the capital market to deliver on this?
It then becomes obvious that if a N32 trillion economy has a N6 trillion capital market, it is highly unrepresentative of the economy and ceases to a barometer of its economic reality.
To address this, we must find a way to bring in at least six key sectors of the economy into the market and if these ones are not in the market, a gap exists.
So for us at proshare, it’s a no-brainer why we would be at the vanguard of ensuring that the capital market nexus with the economy is achieved and quite frankly, no other policy can engender market confidence today than a listing proposition that captures this economic segments.
Q: With your kind of services in Proshare what impact have you made so far in the Nigerian Capital Market?
We have a unique model, and so in defining the industries we play in, you will be defining almost three industries. You will be talking about us in terms of Media, Analyst Community and Information services using latest IT and communications technology.
Basically there are benchmarks within these key industries, which we also see how they are faring. Now in creating that combination, which requires three different types of approaches and strategic framework to put together; we have had to operate a model that operates more like a synergetic group structure leveraging the uniqueness which each offers.
Our interest is in original content/news and our move towards the Web TV gives a clear insight into the thinking guiding our market engagements.
Q: What’s the future for Proshare?
We are hopeful that God will allow us to be a part of the change that will occur in this Capital Market, and we are committed to learning from our engagement experiences.
We are committed to also use best practice available to us through our users and partners to chart a new path for adding value and playing the support role we are so passionate about.
Hopefully in that way, we can have a Market that can continue to provide employment to those who work here, and provide a source of earnings for everyone in the industry.
As a person I can’t but be optimistic about tomorrow. I am optimistic about Nigeria – that we would have a way of learning how to manage those we have excluded from all the reforms we have done and we would realize at some point that we are all Nigerians and we should support the current office holders to deliver the excellence we seek. We can make it and we have a unique opportunity based on the challenges in the developed nations to make our realities work for us.
I tell you honestly there would be some tough decisions that would be made and is being made and would be impacting on all of us, so it promises to be a very tough 2012, it promises to be a tough one for every business in this environment, but I can assure you one thing because of the commitment of those around here (Proshare) we can’t but help ourselves to keep on believing and working towards a better market where we have a better chance at meeting our sovereign and individual wealth goals.
End
