Customs Street Advisors

This week on Street Talking in NEXT, I deplore the atrocious treatment retail investors regularly receive from companies on the Nigerian Stock Exchange.

In his immensely entertaining account of the global economic meltdown, Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis – and Themselves, the author, Andrew Ross Sorkin, who is also the chief mergers and acquisitions reporter of the New York Times, describes a charged scene during a Lehman Bank board meeting held in July 2008. As the bank struggled to raise capital, Dick Fuld, its mercurial chief executive, invited Gary Parr, vice-chairman of Lazard Frères, the venerable investment bank, to provide his board with objective counsel on alternatives. Soon after the session began, Fuld felt that Parr was using it as an opportunity to ‘shamelessly plug’ Lazard’s experience with such Armageddon scenarios. Quickly, Fuld cut Parr off and thanked him for coming. Later that day, he telephoned the Lazard banker and threatened to fire him. The unflappable Parr replied, ‘that may be hard because you haven’t hired us yet.’ I enjoyed reading that story. Read More…

This week in Alrroya, the United Arab Emirates (UAE) business and financial daily, I discuss the role that robust disclosure rules can play in averting a repetition of the turmoil that has engulfed the market in the past two years. I have no doubts that the markets would pick up again, but if shareholders fail to draw the right lessons from past experience and companies refuse to change their ways accordingly, then it is only a matter of time before we have another panic season on our hands.

All fingers have been burnt, but some are more charred than others. Across the world, what started as a localized US sub-prime crisis, and later snowballed into a global credit crunch, has not been good to shareholders. While business partners, customers, employees and host communities have all been hit by the turmoil, shareholders have borne the brunt of the pain. They were the first in and it is now clear that they will be the last out. Read More…

This week on Street Talking in NEXT, I share my reservations on the acclaimed merits of recent capital structure reconfigurations, especially share reconstructions and buy-backs by companies on the Nigerian Stock Exchange. In place of these unproven merits, I urge companies to focus, instead, on other less discussed, but surer benefits of such programs for shareholders.

Equity overhang is the new leprosy. On a single day last week, the papers carried reports about Investment & Allied Assurance’s share reconstruction plans and Custodian & Allied Assurance’s intention to buyback 5% of its outstanding shares through an open market repurchase program. Two months earlier, Goldlink Insurance had completed its own share reconstruction discipline. This week, one paper carried the headline ‘Low Share Prices - Firms Embrace Share Buy-backs’.’ Are we entering an enthusiastic era of aggressive buy-backs? Is stock-swamping an odious condition? Read More…

This week on Street Talking in NEXT, I discuss the challenges small- and mid-cap companies on the Nigerian Stock Exchange face in attracting and sustaining investment community attention. I conclude with a number of recommendations.

Initial public offerings and listings are very exciting events in the life of a company. Endless consulting sessions with advisers, regulatory filings, travel logistics for road shows, analyst presentations and PR campaign vetting impress on insiders that the company is crossing an historic threshold. Read More…

This week on Street Talking in NEXT, I discuss the importance of providing fora of visibility for those in the succession line at companies on the Nigerian Stock Exchange.

For an institution long considered key man-captive, UBA has proven the pundits wrong. Less than forty-eight hours after the new Central Bank of Nigeria rule on the tenure of bank chief executives, UBA, without skipping a heartbeat, announced that Phillips Oduoza would replace Tony Elumelu its helm. Three words rush to mind in describing the first phase of the transition: seamless, smooth, style. Up to that point, it was flawless. Read More…

This week on Street Talking in NEXT, I argue that the time has come for public companies on the Nigerian Stock Exchange to lay down rules on the extra-company activities of directors, particularly those which involve regulatory responsibility or political involvement.

I have just finished reading a stimulating piece by Femi Awoyemi of ProShare on the potential conflicts of interest Senator Udo Udoma, the City grandee and chairman of the Securities and Exchange Commission (SEC), will be exposed to in his latest appointment as the chairman of UAC. To calm public concerns over any ethical risks he may run, Senator Udoma, who also sits on the boards of Nestlé and Linkage Assurance, has issued a staunch defense on the correctness of his appointment. The last time this subject provoked a passionate debate was over the position of Professor Ndi Okereke-Onyiuke, director-general of the Nigerian Stock Exchange, as chairman of Transnational Corporation, a quoted company. Read More…

This week on Street Talking in NEXT, I argue for the listing of successful private companies on the Nigerian Stock Exchange.

Alright, so today’s title should have been ‘My Christmas wish list’. In fact, I got bitten by this wishful thinking bug only a few days to Christmas. On December 20, 2009, Binos Yaroe, general manager, Market Operations & IT at the Nigerian Stock Exchange, announced that its governing Council had approved the change in name of its junior board from Emerging Markets to Alternative Investment Market & Private Placements. The move, he explained, was to ‘provide incentives and waivers’ to more companies to list on the NSE. That was the fire for my wire. The only snag is that now that the festive season is over, wish lists have been put on freeze. Well, sort of. But mine is a different kind of dream gift basket. The presents are not really for me in the selfish sense of sole ownership or benefits. On the contrary, granting my wish would profit the genie as much as the kettle rubber. Read More…

This week on Street Talking on NEXT, I review the tactics of shareholder agitants on the Nigerian Stock Exchange in 2009 and identify why they enjoy very limited success in galvanizing popular support.

In his famous 1947 essay, ‘The Sources of Soviet Power’, George Kennan, the late distinguished foreign policy wonk, writing under the pseudonym ‘X’, advised the US government that only ‘the adroit and vigilant application of counterforce at a series of constantly shifting geographical and political points’ could contain Russia’s imperial ambitions. His ideas would lead the US to sponsor several proxy wars in countries far removed from the epicenter of its vital interests such as Angola, Laos and Vietnam. Read More…

This week in Street Talking on NEXT, I discuss the critical role company websites can play  in closing the mispricing gap between stock prices and the underlying value of companies on the Nigerian Stock Exchange.

I am appalled at the failure of most companies on the Nigerian Stock Exchange (NSE) to utilize the web for investor engagement. In fact, about half of the companies on the NSE do not have any web presence at all. Among those that do, only a small number leverage the channel for investor communications despite the fact that a growing number of investors make decisions to buy, hold or sell stocks based on information they find on the Internet. If it is axiomatic that information is the lifeblood of markets, then company websites ought to be the most credible and authoritative sources for relevant, reliable and timely information. Read More…

Under Cecilia Ibru, its former CEO, Oceanic Bank enjoyed a public reputation for ethics in business. However, recent revelations since her removal on August 14, 2009 by the Central Bank of Nigeria have thrown rotten eggs at that edifice.This week on Street Talking on NEXT, I argue that the real challenge before Oceanic Bank today is not merely to retain client custom, but to win back the admiration and respect it once enjoyed as the bank committed to ‘building a stronger Nigeria’.

Commitment. Goodwill. Gratitude. Loyalty. Prudence. Resilience. Stewardship. According to its current ad campaign, these foundational values, all built around institutional dependability, form the seven-fold chord that binds Oceanic Bank to its customers. The theme song of the campaign, ‘Today is a good day’, is an infectious anthem to optimism. Sensually, the campaign aces on visual and aural scores. In fact, the bank and its agency may well go on to win a clutch of awards for the campaign. Alas! This should not be a marketing campaign but an identity crusade.

Read More…