The Chairman of Fidelity Bank Plc, Mr Mustafa Chike-Obi, has said that securities and margin lending can boost the volume of trade in the Nigerian capital market.
A statement said he spoke when he was invested as a fellow of the Chartered Institute of Stockbrokers.
Chike-Obi, who is the pioneer chief executive officer of Asset Management Corporation of Nigeria, also pledged to work with the institute to initiate moves to re-open discussions on margin lending in the Nigerian capital market.
He said, “With margin lending, the Nigerian capital market in addition to all the recent achievements and regulation can bounce back again. Margin lending will increase the volume of transactions in the market. It will create hedging opportunities and value propositions.
“Until we do that, we are going to be a stone-age capital market. This is not for just equities but debts as well. Now that I am a honorary fellow, I shall devote time and efforts to support the market. We shall make sure that margin lending is a reality in the Nigeria in the next two years.”
According to the statement, margin lending provides liquidity from the cash end. It was popular in the Nigerian capital market.
It was however suspended over the manner of its use by some market operators. Securities lending on the other hand entailed loaning of shares, bonds or derivative contracts to other investors or firms to provide liquidity.
Chike-Obi also revealed that one of the biggest challenges he had as CEO of AMCON was debt in the financial market and he realised that he needed to reach a quick solution.
Meanwhile, the CIS’ President, Mr Oluwole Adeosun, hailed Chike-Obi has a worthy being conferred with the honorary fellowship of the institute.
Adeosun said, “Mustafa Chile-Obi has the perfect foundation to be a success in the capital market.
“The governing council of the Chartered Institute of Stockbrokers, in its wisdom a few years ago, decided to admit into our membership community, persons who have distinguished themselves as thoroughbred professionals of the calibre deserving of being a Stockbroker.”