Nigeria Content Online

The
Nigerian Industrial Relations Association has urged Nigerian banks to
avail themselves of emerging opportunities in the industry by looking
beyond retail banking.

The
association, a member of the International Industrial Relations
Association, said banks can participate actively in the vast emerging
housing market while veering into lucrative investment banking market
and prime debt financing.

Shola
Fajana, a professor and head of the department of Industrial Relations
and Personnel Management, University of Lagos, and Secretary-Treasurer/
Contact Person of the Nigerian Industrial Relations Association said
this in Lagos on Friday at a roundtable discussion centred on
‘Industrial relations in the banking sector’.

Mr.
Fajana, while acknowledging the rapid expansion of banking system
through multiple branches, said banks need to expand their business
horizon.

“Banks
have not been able to take advantage of the booming housing
construction market, and they also have poor debt management skills.
They have not explored global prime debt markets- housing equity,
securitised debt, credit cards, housing mortgage, prime lending, and
foreign assets portfolio management among others.

“Banks
have also not explored opportunities in wholesale banking with huge
markets in re- insurance, pension fund management, commodity trading,
and collaterised debts, among others” he said.

Mr.
Fajana said major areas of concern in the banking system are issues
surrounding employment, the equitability of wages, health suitability
of working hours, the improvising of the current trends in training,
addressing employer- conflict orientation, employer union orientation,
social dialogue, the issue of staff outsourcing in relation with core
business strategies, among others.

Foundation of the crisis

Sunday
Salako, the acting National President, Association of Senior Staff of
Banks, Insurance and Financial Institutions, in his address, said the
problems of Nigerian banks are self inflicted and did not just happen
unconsciously.

Mr.
Salako said during the bank failures of the 1990s, many banks crashed,
leading to the invasion of the sector by ‘cowboys’ who took advantage
of the crisis to take over some of the then ailing institutions. “They
came with new ideas, strategies and practices that were very alien to
the system and with their zeal, vigour and support from regulators;
they set foundation for new banking culture and norm. Their focus was
aggressive deposit mobilisation using our poor and in most cases
innocent ladies as baits”.

Mr.
Salako said prior to this period, everyone who worked in the bank was a
permanent staff. “There was no casual contract or outsourced staff. The
career path was well defined and periodic training was one of the
meters for career advancement”.

“With
so much money at the disposal of our banks, it was not long before all
relevant authorities compromised and with impressive balance sheets
being cooked up, the shareholders also went gaga, leaving the entire
banking system at the mercy of these super brats. At this point, the
foundation of was laid for an imminent crisis” he said.

According
to him, this crisis, which might be prolonged, is bound to hit economic
activities beyond what was previously anticipated, adding that from all
indications recovery will be slow. “In all, the crisis has affected the
economy quickly and strongly through channels like credit crunch and
drop in foreign direct investments,” Mr. Salako said.

The
Nigerian banking industry was greatly hit by financial crisis last year
when 10 of the 24 banks failed the central bank’s special audit last
year. The central bank thereafter injected over N600 billion to save
the banks from imminent distress, after it relieved about eight
managing directors of their jobs.

However, at the last Monetary Policy Committee Meeting held earlier
in the month, the central bank noted that however fragile, the domestic
financial markets have recovered remarkably faster than expected, and
urged greater efforts in accelerating the reforms in the different
segments of the financial system to promote financial sector stability
which is critical to economic growth.

The Nigeria stock
market took a downward trend this week, in contrast to last week, where
the market somewhat rebounded. The major fall in the market this week
came on Friday, consistent with the lull in the markets all over the
world. World markets dropped sharply on Thursday as sentiment continued
to be hit by concerns about the Greece’s debt crisis and figures
showing an unexpected increase in US jobless claims last week. The
worries left most of the world’s leading indexes now trading below
where they started 2010.

The market’s losses
intensified in light of the recorded declines in international and
regional stock markets during the week, mainly, due to latest
developments in Greece’s debt crisis.

Market activities

By the end of the
week, the NSE AS Index closed at 26,784.90 points, down by 3.49 per
cent from the previous week closing, whereas the market capitalisation
registered a 3.44 per cent weekly loss after closing at N6.52 trillion.
Accordingly, the market’s year-to-date gains were reduced as a result
of last week’s incurred losses, as the NSE AS index’s increase from the
beginning of the year reached 28.61 per cent, while market
capitalisation’s gains became 30.58 per cent.

Apart from the fall
in major markets, profit reaping activities that took place on most of
the trading sessions led to a reduction market capitalisation. Selling
pressures increased in the week, and the indices couldn’t sustain the
positive momentum gathered during the previous weeks as profit taking
dragged the indices to negative territory. Low liquidity stock seemed
to take the forefront in equity value contributions during the week,
while Blue chip shares took the back seat making modest contributions
towards turnover. Equity value slipped by 37.53 per cent when compared
with previous week’s position. As it is, most investors seemed to have
kept to the sidelines during week. Trading volume remained light,
signalling a lack of strong conviction behind the market’s moves.

In the meantime,
the sluggish sentiment may persist as a result of continued control of
cautiousness on the course of trading. Thus the indices will continue
to remain volatile during the coming week. However, investors should
closely monitor the market and capitalise on the bargain hunting
opportunities that exist in the market. In effect, the pullbacks should
be embraced as buying opportunities.

Most active sector

The Banking
sub-sector remain the most active (measured in terms of traded volume)
as it recorded 795.48 million shares valued at N7.96 billion exchanged
in 17,368 deals while the Hotel and Tourism sub-sector was second with
traded volume of 204.05 million shares valued at N731.79 million in 56
deals.

Gainers and losers

The market breadth,
indicating the overall health of the market, was negative on NSE market
in the just concluded week, with 82 shares declining as compared to 16
that advanced. A total of 41 shares remained unchanged.

Corporate actions and results

During the week,
FCMB Plc released its full year trading result on the floor of NSE. The
bank recorded gross earnings of N35.79 billion representing a decrease
of 50.77 per cent from previous year’s trading result. The company also
posted a Profit After Tax of N564.00 million. The Directors proposed
dividend of N0.05kobo per share.

NIGERIAN BREWERIES
released its first quarter (Q1) result on the floor of NSE in the past
week. The company declared a turnover of N40.574 billion representing
an increase of 0.42 per cent from previous year’s trading result. The
company also posted a Profit After Tax of N6.46 billion. The Directors
proposed a dividend of N1.15 kobo.

MULTIVERSE Plc and
FTNCOCOA Plc also released their full year trading result on the floor
of NSE. The Directors of MULTIVERSE Plc proposed a dividend of
N0.01kobo per share, while the Directors of FTNCOCOA Plc proposed a
dividend of 3.5kobo per share.

Furthermore,
AIRSERVICE Plc, GTASSURE Plc and BERGER PAINTS Plc released their full
year trading result on the floor of NSE in the just concluded week. The
Directors of AIRSERVICE Plc proposed a dividend of N0.10 kobo per
share, while the Directors of GTASSURE Plc proposed a dividend of N0.04
kobo per share, and the Directors of BERGER PAINTS Plc proposed a
dividend of N0.50 kobo per share.

Market outlook

The week has
witnessed considerable weakness in purchase activities. Investors are
still cautious about being long at current levels due to value issues.
However, investors’ toast for blue-chip stocks (whose prices have
bottomed out) will make us may see recovery in the coming week.

I only just got
back from a formal training session, where I’d gone to be instructed on
‘strategy,’ and its chances of success in the new, more turbulent work
environment. One confession, which I did not make at the various
sessions that made up the training experience, but which nonetheless is
important to understanding the perspectives here, is that on questions
of strategy, I am completely contrarian.

Thus, it mattered a
lot that the training was facilitated by firm believers in the utility
of thinking strategically as a distinctive business competence. And
that the larger numbers of the class were acolytes already of this
world view. Ignore for the moment, the plethora of buzzwords, and the
facility with which business books’ titles and the names of American
authors rolled of the tongues of participants, and the main argument
was simple.

There was consensus
on what strategy as a course of study is all about. So, it mattered
nought whether it is described in the traditional military sense as
“the process of, or skill in, planning and conducting a military
campaign” or along one of the derivations that business has come to
accept, including as “a long-term plan for future success or
development.”

The point is that
most discussants at the training facility assumed a simple “cause and
effect” relationship. To think strategically, it turns out, all that
needs to happen is for top management to get the “numbers right.” From
there, the firm is better positioned to put in place a measurement
system (preferably through the “balanced scorecard,”) commence
measurement of the resources deployed, and presto – it’s almost like
“magic!”

My concerns are no
less simple. Whereas for a military-type campaign, the decision
parameters are mostly given: troop numbers; equipment type, equipment
quantity; the spatio-temporal strength of supply lines; terrain
support; etc. We cannot say the same, any longer, of contemporary
business conditions. All you need do to understand what students of
chaos theory call the “non-linear feedback systems” challenge is try to
itemise the range of effects in our interconnected world to which a
single cause can lead.

Framed differently,
what does the believer in the benefits of traditional “strategic
planning” make of the following episodes, and their unintended
consequences? The July 4 2004 consolidation in the Nigerian financial
services industry, and how it re-shaped the industry in the country;
the September 11, 2001 coordinated suicide attacks by al-Qaeda upon the
United States, and their effect on the just-in-time production
revolution in developed economies; or the demise of the “central
planning regimes” after the collapse of the Berlin Wall in 1989.

Doubtless, the
possibility of infinite variations of cause should force us to take a
more critical look at the standard estimation techniques behind most
attempts at formulating strategy.

What follows from
these? Does the death of strategy eliminate the need to plan? Now, I
think not! In planning, the proper tension is between linearity and
non-linearity.

In a world in which
the multiplicity of links and interdependencies ensure that effects are
not proportional to their causes, or in which even businesses have come
to realise that a team working together might often achieve results by
far superior to the results from the combined effect of each working
individually, the balance of activity rapidly flits between choice and
chance.

In effect, what
remains for the manager is his/her operational control over the
near-term. Within this context, the main questions that planners must
address is what the costs would be to them, if the decisions they make
turn out wrong. Ideally, in the absence of serious downside risks,
planners can proceed down as many turns in the road as catch their
fancies. Unfortunately, since the cost of failure is often potentially
very large, planners do well to avoid certain policies even if the
probability of success is better than 50-50. In this case, the cost of
failure is a major constraint.

If we, then, narrow our plan effort in the knowledge that “the
spontaneous self-organisation of economic agents leads to unpredictable
and emergent outcomes”, then four plan parameters remain open to us:
keeping the decision-making process simple; avoiding conservative
orientations; keeping costs down; and a readiness to embrace new
products/technologies.

Nigeria’s richest man, billionaire Aliko Dangote, on Monday denied media reports that he was considering buying a 16 percent stake in English Premier League soccer club Arsenal.

Britain’s Sunday Times newspaper and other media reported that Dangote had registered his interest in buying a stake being sold by Nina Bracewell-Smith, the club’s fourth biggest investor.

“I am a longstanding supporter of Arsenal Football Club and have been involved in conversations around investment in the past,” Dangote said in a statement.

“However, I can say categorically at this time that I have no intention of investing in the club and will not be acquiring a stake. I wish Arsenal Football Club the best for the future and will continue to follow the team as a fan.”

REUTERS