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Uwana Ekpat heads Coronation Securities Limited. She speaks in this interview with Iheanyi Nwachukwu. Excerpts
Currently, many securities traders in Nigeria and other global markets are leveraging technology to ensure efficient service delivery to their clients. How has Coronation Securities Limited played in that aspect?
With the advancement in technology, these days’ investors can conduct capital market transactions from the comfort of their homes through the internet, Coronation securities has continued to stay abreast with the diverse changes in technology as we continually deploy edge cutting technologies to aid our clients in investment decision-making and execution of trades.
We have made it possible for investors to place their orders/ mandate using our online trading platform and to also get real time market updates, it is important that our clients derive supreme value first before any other consideration.
You provide full-service platform that allows your clients to take advantage of market opportunities, as well as access to structured products, bonds and alternative investments. So far, what are the challenges you encounter in the market place?
The primary challenge faced by the stockbroking business with regards to clients taking advantage of market opportunities is poor level of participation by the investors, especially local retail participation which is partly underpinned by inadequate investment education and bearish sentiments around the Nigerian capital markets as a whole.
There is a growing need for regular and intensive Investor education in the market place in-order to keep abreast with current and new product developments in the space; we also need to take proactive measures that would aid in building retail investor confidence.
Can you tell us about your remodeled Online Trading Portal that enables you execute trades in real-time on the Nigerian Stock Exchange (NSE). What makes the Portal different from that of others?
Coronation e-trader is an online trading platform which allows users buy and sell stocks online through the Nigerian Stock Exchange (NSE) from anywhere in the world. The platform creates a world class experience, bringing the broker to the comfort of investors’ homes and offices. The platform guarantees investors’ convenience as it enables investors open virtual stockbroking accounts. In addition to this, the platform gives real-time notifications on trade executions and provides convenience for the investor to trade the way he/she wants whilst taking full control of their investments at all times. Another amazing feature of the platform is that it provides users with market data and information on all quoted companies, accompanied with quality research reports that help our customers make safer investment decisions.
It is barely four years now since you started operating independently as an investment securities and financial advisory firm. What strategies do you have in place to see you play in the “top ten” league in terms of deals volume and value?
Although there are some players operating above us on the Nigerian Stock Exchange league tables, you will agree with me that our market is still a perfectly competitive structure, hence Coronation as a group have outlined strategic and trajectory growth initiatives to ensure that we are on the path to being market leaders in all aspects of our business by 2022. In the little time we have operated, we have made considerable strides especially when compared to where we were a few years ago.
Our strategy focuses primarily on growing the retail client base and dominating the foreign & local institutional aspects of the market. As a forward thinking organization we will continue to strive for excellence through exceptional service delivery by ensuring immediate and efficient transaction process, offering personalized solutions that are tailored to meet our customers’ specific business needs and conducting ourselves in a manner that exemplifies deep industry knowledge in the execution of daily transactions.
Many schools of thought see need for Nigeria to deepen tradable instruments in the capital market. Are you one of them?
Certainly, we are aligned with that school of thought. Market deepening is a major priority, it is a vital part of increasing the enthusiasm, penetration and competitiveness of our capital market. One major instrument that the market is looking forward to is the introduction of Exchange Traded Derivatives (ETD’s) as this is expected to further augment the complexity and scope of the capital market following the introduction and listing of an Exchange Traded Fund (ETF) in 2011. Given the derivatives market’s global nature, users can trade around the clock and make use of derivatives that offer exposure to almost any “underlying” asset class across various markets around the world.
However, It is imperative that adequate feasibility studies are carried out and appropriate regulatory measures are put in place to mitigate counterparty, operational, liquidity, systematic and legal risks, the global financial crisis between 2007 and 2010 is a testament to the adverse side of derivatives.
As stockbrokers for primary issues, you intermediate between new and existing clients and the Nigerian Stock Exchange (NSE). Do you have plans (even if incubatory stage) that will see you bring any “big issuer” to the market soon?
We certainly do! Nigeria is officially out of recession, hence there is no better time than now for any issuer with a compelling story that promises favorable returns for investors, to list on the Nigerian Stock Exchange. Stockbroking Firms live for moments like this as the onus is on us to convince Investors of the viability of ‘the Listeners compelling story’ thereby contributing to the growth and expansion of the Capital Markets.
Which of these investors dominate your clientele base? – Foreign investors, domestic investors or a mix of both. What also is the place of domestic institutional investors in your clientele base?
Our clientele base is a cocktail of domestic and foreign Institutional investors, we also have a healthy mix of retail players who are seeking to grow their portfolio through our Online Trading Platform. I must say that the introduction of our Online Trading Platform has enabled investors move away from the traditional method of executing trades through stockbrokers by either giving them orders to buy or sell, allowing them trade real-time and execute mandates themselves from the comfort of their homes and offices.
In response to your second question, domestic institutional investors in our clientele base are largely skewed towards Pension Fund Administrators (PFA’s). We also record a fair amount of participation from Asset Management Companies that have equity based funds and some Insurance Companies. It is not news that if you look at their overall portfolio most of their investments are largely fixed income securities, however with the current yield environment and the favorable macro-economic conditions, we anticipate a ripple effect which will culminate in the rebalancing of their portfolios to favor the equities market.
Despite earlier weak sentiment around equities trading, most operators still maintain their positive near-term outlook on the market especially as first-quarter (Q1) 2018 results start to trickle in. What is your take on this? …What is your outlook on equities market and fixed income market?
We continue to maintain a positive outlook for the equities market, as share prices are still relatively low amid positive macroeconomic fundamentals such as declining interest rates, the continuous fall in inflation levels and the recent hike in crude oil prices. The fixed income space has witnessed some pressure in recent times and we believe that yields will decline further in the short to medium term as system liquidity remains sturdy.
You are registered with both the NSE and FMDQ to trade fixed income instruments on their platforms. For unlisted securities, you also provide access to the Over-the-Counter (OTC) NASD platform. How has it been operating in these markets? …Are there areas these Self-Regulatory Organisations (SROs) need accolades or improvements?
The capital market has evolved over the years and I must commend our regulators on the implementation of transformational initiatives which has helped improve the system. However, considering the dynamic nature of the global economic system particularly the financial sector, our regulators should not relent in their quest for relevant initiatives that create opportunities and tackle emerging challenges.
To increase confidence in the market, I think Capital Market regulators need to intensify their efforts in investor education and protection.. However, as a key stakeholder in the sector, we will continue to benchmark ourselves with advanced markets and support our regulators in the delivery of a more robust and transparent market, all hands are surely on deck.
Regulation is key in attracting foreign inflows into the markets. What is your advice to capital market regulators?
Market regulations are very friendly to foreign investors, this is seen in the recent creation of the Investors and Exporters FX window by the Central Bank of Nigeria (CBN) which is aimed at improving liquidity in the foreign exchange market. Other initiatives is the creation of the Premium board by the Nigerian Stock Exchange (NSE) in 2015, this was enacted to showcase Nigeria’s best stocks to the global markets. The Premium Board is the listing segment for the elite group of issuers that meet the exchange’s most stringent corporate governance and listing standards, four (4) Companies recently migrated to the board in 2018, making it a total of seven (7) companies so far in this elite list.
Also the co-branding of index series such as the MSCI Nigeria Index which is designed to measure the performance of the large and mid-cap segments of the Nigerian markets is another initiative geared to foreign investors. My advice to our regulators is to not relent on these efforts as the current ones have undoubtedly gone a long way in restoring foreign investor confidence in our markets.
What is Coronation Securities Limited biggest goal in 2018 and beyond?
Our biggest goal is to be industry leaders in our business segment. Synonymous to the brand we represent, we are on a journey to become Africa’s premier Securities firm, hence in other to achieve this, we would continue to drive comprehensive investor education among retail investors and also restore general investor confidence in the markets. We will also continue to work with the regulatory bodies to deliver on the goals and development of the market.
