TheCable

I sincerely hope that we are all seeing the rumblings at FBN Holdings. The big boys are playing Russian roulette, and we 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 Nwaguogwo’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.

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 damning institutional weakness due to 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 – commercial papers 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 two billion shares of the premier depository in the market – the CSCS

Now, on the surface, we should clap because there is nothing better than competition, but a quick cursory look will show you the Central Bank of Nigeria’s role in this growth.

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

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. 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 towards the favoured 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. I wonder how a board would approve a transaction that is clearly driving the institution towards a 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 commercial papers of huge conglomerates who 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 of which it must subject that portion of its operations to regulation by the 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 u 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 behoves on 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.