Nigerian Stock Exchange can’t collapse — Swiss-based Nigerian economist

FEW days ago, a Nigerian owned Swiss-based firm, AME &T Group, organised a four-day seminar on Private Wealth Management (PWM) for top executives of banks and other professionals in the country. The resource persons were experts drawn from leading management institutes in Switzerland.
In exclusive interviews with Financial Vanguard, the President of AME & T (the Nigerian that organised the seminar) and three of the resource persons spoke on the seminar and various other economic issues. Could you give us a brief resume of AME & T Group that just organised the seminar on private wealth management in Nigeria?

It is basically an enterprise development management, an investment advisory firm. We do a lot of risk management in wealth management as well as sustainable enterprise development practice.

We have done a lot of jobs managing clients, both institutional and private, as well as government, especially governments from Africa in area of maximizing their wealth with Europe, especially Switzerland, whereby they could tap into Switzerland’s private banking practice as well as investment banking practice viz a viz the growing trend in African countries to tap into strong countries in terms of project management like currently, the Federal Government of Nigeria is trying to raise bonds.

They are doing that by approaching international financial institutions, not only on the investment banking, but also on private banking. There is need for that exchange of knowledge and expertise. We have advised a lot of multinationals as well. So, basically, that is our core practice.

AME &T Group is structured into three key products and services. One is Enterprise Development and Management. We have advisory services and then the training arm. These three components actually dictate the way we operate and our core practice. Then there are some services under our advisory.

For instance, we have Investment Advisory section that deals with energy industry. We advise quite a lot of multinationals on raising finance may be from private equity clients of our investment outlet. It could be loan or whatever has to do with their investment banking-related issue. That is in the oil and gas sector. We also handle telecom investment advisory.

Basically, what we do is work with institutions that are willing to maximise profitability. We also provide some finances in terms of arranging loans as well as helping them to structure their finances in a way whereby they could tap into foreign funds. Thirdly, on the training aspect, which is part of the advisory also, is where we bring our expertise to bear in an environment like Nigeria that is evolving. So, that is the way we are structured as a Swiss firm.

We are a decade old. We are more than that in actual sense, in that AME & T Group came as a result of an acquisition of a Swiss company which is about 50 years old. We re-structured it and repositioned it to meet the needs of our immediate clients in the investment banking-related field. Our passion for wealth management came as a result of our expertise in that field. We try to impart that expertise and knowledge to our clients and various institutions - be it a non-governmental organisation (NGO) or individuals - depending on what they want. So, that is the way we are structured.

The training we conducted in Nigeria was the first of its kind. We had a similar event in Geneva, private banking training, which we did in 2004. We had some institutions that attended that. But this was a bit tailor-made for the Nigerian audience.

That of Geneva was more of an international event. We had coordinated and organised series of teachings and lectures for top executives from Africa. An example was the one we had with the Swiss Stock Exchange in Zurich about three years ago.

So, we are well known in the Swiss environment to provide qualitative training as well as in-house training for clients especially those from emerging or transiting economies like Nigeria. So, one of the reasons we decided to do it here in Nigeria is because of the post-consolidation of the banks knowing full well that a lot of banks are diversifying into private banking. A lot of them need the expertise.

We managed to have one-on-one discussions with some of the top chief executive officers (CEOs) of these banks. From our researches and findings, we realised that a whole lot of them do not have solid background on private banking practice.

It was as a result of this research that we decided that we should provide this training capacity to these top level executives from these institutions. This, to us, is a welcome development and from the response that we have received so far, we believe that there is definitely going to be a lot of follow up on this subject.

Agreed that Nigeria is a transiting or emerging economy, there was a recent prediction by the United States intelligence agency that the Nigerian economy would collapse in 20 years time. What do you think about that report?

Well, that is more of a political statement than economic statement. Political because it basically came from the CIA’s intelligence report on Nigeria. Economic indices state that definitely, Nigeria has a growing pattern and that pattern will continue to grow as long as the nation remains the same. That is, if it does not disintegrate, we will continue to have the economy. From the economic point of view, there is no basis for that. They have to match that prediction up or such analysis and forecast with current trend in the economy.

There is another prediction and anxiety that the Nigerian Stock Exchange will soon collapse. Did you hear about that and what do you think about it?

Yes, we heard that and we are following it. But I have to tell you that the Nigerian Stock Exchange will not collapse. It will correct itself. The collapse of an exchange in a way is impossible especially in a regulated economy and also in a liberal economy, in that you have an all-share-index. Basically, you do not expect a nation’s stock exchange to collapse.

It means all the companies will collapse. That is what they are saying in essence, which is impossible. Right, there will be bubble and there will be effect of such bubble. But that does not mean that a nation’s stock market will collapse as a result of that bubble. There will be some fundamental adjustments and changes.

You do not expect that the market has to be perfect all the time. I tell you, there is no perfect market or perfect economy. Even the New York Stock Exchange, London Stock Exchange, definitely they experienced this kind of bubble. There is always this kind of upward and downward trend in any market economy. It is correcting itself because, the Nigerian economy was only just of recent opened up and also, it is just of recent that you are witnessing that kind of inflow of funds from investors.

Definitely, that would affect your trading pattern. It will affect the market itself. The stock market in every way, is regulated. For instance, three years ago, we were here and met with stock exchange leadership led by the Deputy Director-General, we realised some of these abnormal trends.

Even the trading volume at that period was extremely low and what we were even clamouring for was a higher trading volume to attract foreign investors and make the exchange more liquid. Now with post-consolidation of the banks, you have seen that a lot of those banks have brought in a lot of liquid cash into the stock which has made the stock exchange a little more vibrant, more dynamic and more attractive. That is why you see a lot of people coming in.

That is what is affecting the market now. There is too much influx of funds and this is giving it that level of vibrancy that was not the pattern years back. It is shaky.

That is why we call it bubble. Right now, there is a redefinition of the whole market. Someone like me who never believed in the market, now I have a lot of funds invested in various Nigerian stocks. The consolidation of banks, other financial institutions, that itself has created a lot of transformation in both the financial services sector as well as the stock market.

You as a Nigerian, you have a company in Switzerland. Nigerian government is clamouring for Nigerians in the diaspora to come home and invest in the economy. When are you going to do that?

We are doing our best to come back. Like I met with President Yar’Adua, during his visit to Davos. We made a presentation, our firm was among what they called Zurich 9. I had my foreign associates with me. We really talked with the president about a whole lot of investments in Nigeria rather than chasing contracts. Our approach is really to try to drive volume of funds and investments to Nigeria. So, we set up, that is our other practice, a First African fund which we are going to launch very soon and this was part of the presentation that we made to Mr. President.

The fund will invest in both listed equities as well as conduct private equity bills. We are looking at bringing quite a lot of investments into the Nigerian investment arena. That is my own part of driving volume and helping the economy to grow. But to come physically, I think Nigeria still needs me there to help bring the money. When I am here, you will not have that access anymore.
What is discouraging you from coming back to Nigeria?

Nothing whatsoever except that it is just an issue of mindset and what I consider to be my comfort zone. I am comfortable there. At the moment, I do not have any comfort zone here.

If for example, there is stable electricity, will you come?
You are bringing a whole lot of political issues that I would not want to talk about. Well, that is part of infrastructural development.

That is actually an aspect we will be willing to participate in and we will like to advise the government. I will say to you as an African firm based in Switzerland, for 40 years the Nigerian government never owned a property in Switzerland. We advised the government and a new Chancery in Switzerland was acquired through us for the government of Nigeria. The Swiss Government is indeed very grateful about this.

So, we have been advising the government. This is one of the things we have been doing to improve the nation’s image there. So, the first Chancery of the Nigerian Government, owned by the Federal Government, was bought last year, moved in last year by the Nigerian Government. They now own a property and they are no longer in a rented property.

They had been in Switzerland for 40 years without owning a property and wasted money for 40 years in Geneva which sits almost 70 per cent of all United Nations agencies. It was a disgrace at a point. So, we had to come in to bail out. So, it is one of our success stories.—Vanguard