VICTOR OGIEMWONYI
It is human nature to want to blame failures on others. As they say winners attract many owners and losers the opposite. A year ago, the Nigeria Stockbroker was celebrated all over; investors loved them; they made money for investors, lots of it, they were even referred to in some tabloid magazines as the new big boys. Some of them even started to pretend they were rich and became big spenders.
The current economic meltdown and the resultant effect on the economy and the stock market particularly, changed all that. Not only are they now one of the most hated groups in the country, some are now some of the poorest. Every one now has a name for them .Overnight they have replaced bankers as the new whipping boys. They have all suddenly become dishonest and manipulative, and in some extreme cases, called thieves .The reality is that stockbrokers are mere conduits that pass money from an original server to a final user. Yes, some give advice, but no one is under any obligation to take their advice. Besides, it was the same advice that made all that money that kept bringing investors back. I must state outright that as a member of the Stock broking community, some readers may accuse me, of bias and of defending stockbrokers. I am only interested in stating the case as it is, so as to present the side of the honest stockbrokers who are hardworking and also facing similar crisis as their investors. I don’t believe there are stockbrokers who like the current situation. I am however unable to defend those stockbrokers who knowingly sell their investors’ stocks, appropriate monies put in their care or exhibit any other bad behaviour not expected of a serious professional stock broker. I can only say that the few in this category will no doubt represent a small percentage of our stock brokerage community and definitely, also indicative of the population of crooks in every other profession in the land- the 419 lawyers, the dodgy Estate agents, the bribe collecting bankers etc.
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My point is that the times always dictate the current victim. Finance houses and their operators were the standard crooks in the eye of the public in the early 80’s when finance houses failed in droves and operators vanished overnight and investors lost money. In the 1990,s they were replaced by bankers and their failing banks. The irony is that in all the cases, greedy investors and the public, including the cacophonic Nigerian press that over sell these institutions and their operators all refuse to acknowledge their role in the new situation. Investors who put money in wonder banks like Forum Business Finance and Plan Well, (some of the most popular in their days) don’t see their role in building up these institutions that the most prudent man can easily evaluate as too good to be true and thus avoid .The greedy investor insist on dealing in this fools’ gold only to come later to blame everyone but themselves.
They blame the operator, the regulators and everyone else. The fact is, that the inability to sustain these operations is obvious in the tell tale signs of the unusually high expectations, in terms of returns, and the herd mentality that usually goes with it. Everyone rushes to be the next millionaire without minding the risk.
This is not the first time the stock market and stockbrokers are being vilified for excesses; it is usually in difficult times. The critics who see prices going up daily, don’t see anything wrong, until the prices start to trend down .That is when they descend on stockbrokers, charging them with everything from manipulation to all manner of fraud allegations.
1997 was another such year .The Nigerian Stock market was trending down, with prices falling, except that the trouble, was essentially a case of uncertainty in the economy .The political environment was stifling, the economy was in the doldrums, the Asian economic crisis that eventually spread to South America and Russia was just beginning and the Nigeria Stock Exchange was implementing the newly introduced Central Securities Clearing System, CSCS. Oil was selling way below $20 a barrel and the price of oil was going down even faster, as demand for oil slowed. Following the economic crisis in these other regions, our markets reacted and witnessed a slow down, not any thing close to what we have today. But then, there were very few players in the market. The prolonged slow- down also resulted in many commentators accusing the markets and its operators of manipulation and fraud. I remember reacting at the time; I had written an article for the Guardian which was published with the title Hate comes to the market. I argued then that markets are what they are, they go up and they come down. The duality of the elements that govern the market never change, people just don’t learn.
