How to make stockbroking relevant amid recession, by experts
As the ongoing economic recession continues to affect the financial market with dire consequences on the income streams of operators, capital market experts have prescribed ways on how operators can remain relevant in the business.
Stockbrokers have consistently expressed deep concern that the current operating environment characterised by high interest rate, weak purchasing power, poor corporate earnings, unstable exchange rate, high inflation rate and investor apathy among others are fast eroding their dwindling income fueling speculation that many of them may be pushed completely out of the business.
But capital market experts have urged operators to invest on knowledge to enable them become more innovative and stay ahead of trends.
For instance, the President and Chairman of Governing Council, Chartered Institute of Stockbrokers (CIS), Oluwaseyi Abe, advocated personal development on the part of the stockbrokers in order to expand their income streams.
“ Recession is a time to take a breath. Invest on knowledge this time and be moderate. Stockbrokers should be multitask to be relevant on all platforms and Exchanges.”
The Registrar and Chief Executive, CIS, Adedeji Ajadi advised stockbrokers to be more creative and ready for diversification in order to remain in business. “ This is not the time to limit business opportunities to trading listed securities. What about bonds, unlisted equities and foreign exchange?
“ Stockbrokers are also investment advisers. This is the right time to work with governments at various levels as consultants and advisers on how to create alternative sources of revenue, and better manage scarce resources to ride through the challenges of the economy at this time,” Ajadi explained.
The Managing Director and Chief Executive Officer, Network Capital Limited, Moluropo Dada, stated the need for stockbrokers to leverage their wide professional latitude to diversify into money market instruments by way of portfolio switching in favor of money market instruments such as Treasury Bills.
Dada described money market instruments as very attractive at present as the federal government is deploying them to attract foreign investors.
“This possibly accounts for massive sell-offs of some stocks in the market. Stockbrokers are now buying instruments with strong fundamentals like Nestle Foods and Nigeria Breweries for proprietary trading to remain in business in this period of recession,”Dada added.