N25bn: Stockbrokers Back CBN
By Uche Obike
The Chartered Institute of Stockbrokers (CIS) said the N25 billion capital base for banks in Nigeria recently announced by the Central Bank of Nigeria (CBN) was aimed at sanitising the banking system.
Responding to questions recently in Lagos, the President of the Institute, and Chief Executive of Reward Investment Limited, Mr. Henry Olayemi explained that in a bid to sanitise the banking industry, the CBN considered option to increase the capital base of players to the market and those who do not have the muscles to play the game should step aside.
"There are so many things that will unfold in a couple of months now, one is that if you even look as at today, none of the banks either quoted or unquoted have the N25 billion except the shareholders' fund," he said.
He added that "all over the world, it is like a phenomenon. People merge and come together to consolidate their position and when two or more come together, they will gather the strength and muscle."
Olayemi predicted that the "in the next couple of months, the capital market will be active as many will want to seek increase from the capital market and we will also see a aggressive search for foreign investment to enable some of the banks meet up the new requirement."
He added further that there will be increase in the activities in firm of mergers, as the various stages of going through a merger will be very active in the next 18 months.
He, however, cautioned that what was going on in the banking sector was creating a lot uncertainties, fear in the heart of investors. "I have a positive feeling towards capitalisation," he said.
Olayemi explained that most sectors on the daily official list of the Nigerian Stock Exchange (NSE) were not as active as the banking sector. He said because the banking sector was in the jittery moment, it had started to set the tone of what was going on in the market presently," he said.
The Institute of Chartered Stockbrokers, Olayemi said "it was set to train brokers and to certify brokers that rules the markets. Certifying them include the training programme and empowering of members.
"Today, we have quite a number of our members that have gone through the training programme and have been certified and are dealers in the stock exchange," he said.
He noted further that "we have doctors, engineers, journalists in our midst that have qualified as brokers. It takes 18 months for you to clear your papers. Our aim is not to mass produce our members. The figure we are able to present at the end of an exam, is the one we are able to defend at the end of the day. Our desire is that when you are talking for someone you can engage in financial business you look for a trained broker and that will be a profession of choice in the market. And that is what we are trying to do."
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