Ndi Okereke-Onyiuke and bears of the Capital Market

  • Sunday, August 24, 2008 - By EMEKA OKOROANYANWU
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Until her arrest last week by the Economic and Financial Crimes Commission (EFCC), Professor Ndi Okereke-Onyiuke bestrode the Nigerian Capital Market like the proverbial colossus. Not only was her influence awesome at the Nigerian Stock Exchange (NSE) where she was the director-general, she was feared and dreaded at a sister organization, Securities and Exchange Commission (SEC). Among stockbrokers, Okereke-Onyiuke’s word was law and woe betides whoever disagrees with her on issues about the Exchange. At the SEC, she was silently referred to by staff as ‘Iron Lady.’

Outside the capital market, Mrs Ndi Okereke-Onyiuke commanded high level of respect, especially among quoted companies and officials of government. Her respect, analyst say, was deserved, following the positive impact she has created in the capital market since she assumed office as the director-general in January 2000. Since becoming the DG of the Exchange, the market has recorded astronomical growth based on market indicators.

The index rose from 100 units in 1984, the base year to 1,107.60 in 1992, hit the 10,000 mark in 2001, rose to 20,128.94 in 2003; 23,844.45 points in 2004 and as at December 31, 2005, it stood at 24,055.76. The market turnover grew by 16.44 per cent from N225.82 billion in 2004 to N262.937 billion in 2005.

As at the end of 2005, the number of listed securities stood at 288 with a total market capitalization of over N2.900 trillion. Today, there are over 300 listed securities on the Stock Exchange. All these growths are attributed to a large extent to Okereke-Onyiuke’s astuteness in driving the market. However, over the past few months, the Nigerian capital market has experienced a downturn of activities with the All Share Index losing 31.21 per cent of its market value, from a 66,121.93 peak in March this year to 45,003.96. Market capitalization tumbled from 12.6 trillion in March to N9.16 trillion.

Mrs Okereke-Onyiuke has been acknowledged by many as a brilliant and focused professional. No doubt, she has brought her professional savvy to bear on the activities and growth of the capital market.
Outside the capital market, however, Okereke-Onyiuke’s activities have roughened a few feathers, resulting to many seeing her as overbearing. For instance, Mrs Okereke-Onyiuke’s actions and activities during the third term project of former President Olusegun Obasanjo did not elicit cheers from many Nigerians, especially the corporate world. Through her activities, she left no one in doubt that she was at the forefront of the campaign to give the former president a third term in office, against the wishes of majority of Nigerians.

Professor Okereke-Onyiuke also stirred controversy when she assumed the chairmanship of Transnational Corporate (Transcorp) a quoted company, as against regulations guiding the market. She was equally visible when Chief Olusegun Obasanjo launched an ambitious library project which netted in about N6 billion. It was said that Mrs Okereke-Onyiuke used her position to compel some quoted companies to donate generously to the project.

As if that was not enough, the Exchange Director-General was reported to bully stock broking firms into stepping in line on many occasions to the chargrin of the stockbrokers.
The last straw that broke the camel’s back was the recent Obama for Africa Project where the DG organized a dinner which was reported to have grossed N100 million. Tickets were allegedly sold in the category of platinum (corporate table for eight people for N2.5 million and individual N325,000).
For the gold category, the ticket prize was N2 million for corporate table of eight and N275,000 for an individual.

But in a swift reaction, the campaign organization of the Democratic Party’s candidate for the United States election, Senator Barack Obama dissociated itself from the activities of the Ndi Okereke-Onyiuke-led Africa for Obama group. The group said the Obama for America was in no way related or affiliated with the fund raising in Nigeria. Based on this disclaimer, Professor Ndi Okereke-Onyiuke was picked up last Wednesday by the EFCC.

Analysts are alarmed that the arrest of the DG of NSE may further compound the grave situation in the capital market where equities have been tumbling like a pack of cards in the past few weeks.
For instance, the market recorded a sharp decline in stock prices on Thursday when the news of the arrest filtered out to the public. At the close of business that day, all the market indicators were in the red as the index, which monitors the mood of the market plunged by as much as 1.5 per cent to drop to 45,003.96 points, while the capitalization of the equities shrank by N14 billion to close at N9.18 trillion. They opened for business at 45,691.28 points and N9.32 trillion respectively.

Analysts linked the development to the arrest of the boss of the Capital Market by EFCC, noting that the development could lead to a shake of investors’ confidence as the market is confidence-driven. The fear is that the incidence may trigger off a rush to sell off shares by investors who may mistake it to a crash of the market.

As if to affirm this position, out of the 76 equities that reflected on price movements, only 13 of them could make the gainers’ list while 63 suffered various degree of losses.
It is not clear when the bears will eventually leave the market, but there are indications that the recent events in the market has already compounded the bad situation.
While Mrs Okereke-Onyiuke’s fate still hangs on the balance, there is a doubt that the capital market will still be the same whether with or without Professor Okereke-Onyiuke.

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