Director-General of the Nigerian Stock Exchange prepares to exit office, self-adulating a decade of service
By Clement Oriloye
Few of her audience believed Professor Ndi Okereke-Onyiuke Director-General/Chief Executive Officer, Nigerian Stock Exchange, NSE, when she enthused that some admirers of her leadership style are averse to her exit. Okereke-Onyiuke, who will be knocking 60 years on 2 November 2010, has been serving the NSE for about 27 years, 10 of them as Director-General. On 12 January this year, she gathered capital market correspondents to regale them with her achievements. Her tenure, she told them, has been so fantabulous some quarters are mounting intense pressure on her to continue the “good work” into the future. An exchange of opinions among the journalists after the briefing indicated she was just gassing, not entirely on her achievements but on her departure. Barring a surprise, the time is up this year for the amazon of the capital market.
None doubted the fact that Okereke-Onyiuke has thrown her massive frame about in the industry and impacted profoundly on the image of the NSE at home and abroad. After she took over from Apostle Hayford Alile as Director-General in January 2000, she was confronted with the challenge of expanding the capital market horizon and raising the ethical standards of capital market operations and, indeed, those of the entire business community. As Pascal Dozie, chairman of Diamond Bank and then president of the NSE Council told her, her performance would be measured by the ability of the nation to use the exchange as a yardstick for measuring the growth of the economy and the successful interface between the capital and the money markets.
On positioning the exchange as a barometer to gauge national growth, Okereke-Onyiuke, analysts posited, has won some measure of success. But there was wide cynicism on whether she has raised ethical standards. If anything, ethical standards, during her tenure, have become a manipulative tool for players in the industry, especially quoted companies, stockbrokers and even NSE staff, to perpetrate unethical activities for self-enrichment. These last two years of Okereke-Onyiuke’s tenure have thrown up a couple of questionable practices on the stock market. One was the criminal manipulation of African Petroleum shares. And another was the exposure on how a stockbroker, Peter Ololo, was the tool that quoted companies, banks especially, were using to artificially affect the flow and prices of stocks. Ololo was just a scapegoat. Manipulation of stock prices, Dayo, a stockbroker told this magazine, was a general practice among stockbrokers on behalf of their clients. Most of the time, the NSE looked the other way. In the light of the scandals that rocked the capital market within the last two years, the NSE and its fellow industry regulator, the Securities and Exchange Commission, SEC, came under heavy criticism for their sloppy monitoring and supervision of activities on the market which allowed for all sorts of sharp practices.
Yet, Okereke-Onyiuke can well celebrate. The Director-General described herself as “a focused and challenge-driven executive with over 20 years of experience and achievements spanning the academics and financial/investment services industry, and a versatile, articulate, numerate and experienced decision-maker with excellent organisational analytical, computer and interpersonal skills.” To some extent, she has manifested most of these qualities in her position as the chief executive of the NSE. The Exchange, during her tenure, recorded astronomical growth and attracted the attention of both domestic and foreign investors. In no time, shareholders in quoted companies rose from about 3 million in 2004 to over 12 million today. Until March 2008 when the market began experiencing a drastic slide, the NSE had grown in leaps and bounds as measured by the key performance indicators of market capitalisation (a measure of the total value of listed equities) and the All-Share Index, ASI (a measure of aggregate movement of share prices).
From a mere 1,107.60 basis points in 1992, ASI rose to 20,128.94 points in 2003, three years after Okereke-Onyiuke assumed office. By 31 December 2007, ASI had gone up to 57,990.00 points, while market capitalisation was N13.29tn. But by the close of trading on 31 December last year, market capitalisation had shrunk to N4.989tn, just as ASI dropped back to 20,827.17 points, the position it was in 2004. The decline can be attributed mainly to equity price losses occasioned by the global economic meltdown. Before the capital market crisis, the market was exposed to high level of activity in the primary and secondary markets. The director-general’s astuteness in driving the market saw improved awareness of the opportunities in the stock market. Investment activities of pension funds and low interest rates on deposits in the money market were also responsible for the upsurge in the capital market, noted Dr. Oba Otudeko, immediate past president of the NSE.
In July 2007, the NSE celebrated its N1tn turn-over on a single trading day by staging a road show. It was a landmark; this was more than the N470bn turn-over the market recorded in the whole of 2006. The market touched an all time high of 65,652.38 points in ASI in February 2008. During this time, the NSE was regarded as the most profitable exchange in terms of return on investment across the globe before it took a U-turn in the first quarter of 2008.
Okereke-Onyiuke recorded a plus in the area of bringing in foreign investment. This was made possible by international investment road shows in cities like New York, London, New Jersey, Washington DC, Nairobi and Johannesburg that the NSE organised. Under her watch, the NSE commenced the Automated Trading System and expanded its branches to 13 across Nigeria, just as the Lagos trading floor attained a world class level. The NSE played a leading role in the establishment of the Ghana and Sierra Leone stock exchanges. She also created new sectors on the Daily Official List – Hotel and Tourism, Leasing, Maritime, Media, Mortgage Companies, ICT and other financial institutions.
Last year, the NSE lost its place as leader in terms of return on investment. According to Bloomberg, it recorded the worst performing equity index in 2009. Critics are not absolving Okereke-Onyiuke from the crisis that is currently brewing in the capital market. According to them, the Director-General was singing market vibrancy when the roof of the capital market was being blown off. Rather than regulate it, she was allegedly playing the market all in a bid to earn more commission for the NSE (Commission on Transactions). They argued that Nigeria would probably have escaped the global financial crisis or at, least, the effect would have been less if she had done her regulatory job efficiently. The NSE was believed not to be proactive in performing its function.
At the 2009 convention of the Association of Nigerian Physicians in America, the NSE boss claimed that the uncertainties created by exposures to the global developments induced the panic which led to the widespread dumping of shares and the erosion in values from which markets all over the world are struggling to recover. She said in essence, investors did not lose money but rather they lost value. She also told the National Assembly committees on capital market that the withdrawal of funds from the market by foreign investors following the global economic meltdown led to the crisis in the system in Nigeria. The Director-General blamed the market’s grim fate on banks which she said were the channels through which some of the funds were taken out of the system.
Some critics, unconvinced by the flawless credentials she was flaunting, accused her of being responsible for the controversial appointment of business mogul, Alhaji Aliko Dangote as the 18th president of the NSE in August last year, shortly after the business magnate was mentioned as the key suspect in the African Petroleum share price manipulation saga. She was also accused of dabbling unnecessarily into political matters locally and internationally. Her fraternity with former president, Olusegun Obasanjo, is always cited. In 2003, she was the arrowhead of a select group of leading private sector people called Corporate Nigeria who raised huge money to support Obasanjo’s re-election campaign. She was later rewarded with the chairmanship of Transnational Corporation plc, known as Transcorp, the corporate brainchild of the former president. Okereke-Onyiuke was believed to be a staunch supporter of the former president’s failed third-term bid.
As the NSE moves towards demutualisation, she is expected to lead the NSE out of the woods into a growth path. Can she achieve this within a year?
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