Babatunde Dada: Biggest Growth Engine for Economy Is Stock Market

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Babatunde-Dada

Babatunde Dada, Managing Director/CEO of Anchoria Investment and Securities Limited is a replica of his late father, Chief Olusola Dada –one of Nigeria’s foremost insurance brokers. Having learnt under the tutelage of the renowned technocrat, Babatunde Dada is well-grounded with a BA in Industrial Economics/Insurance from the University of Nottingham and an MSc in International Business Management from the University of Surrey both in the United Kingdom; spent seven years working as a quality assurance consultant in various organizations in the UK. In this interview with Funke Olaode, Babatunde talks about Nigeria’s stock exchange and his mission

You worked in the UK before you joined your father’s company. Were you influenced by him?
Definitely, my father played a major role and influenced what I am doing today. Since when I was a child, just watching my dad, seeing the passion and commitment to work made me want to be like him. Right from the time when he worked in the civil service up onto the bank, and then finally as a stock broker. I monitored every aspect of his career and based on that I said it would not be a misstep if I toed his path. Today, I have no regret.

You studied industrial economy with insurance. At what stage did you delve into stocks?
Well, like my dad who also studied economics, it is a qualification that prepares you for a career part. I made the move in 2008, it was really when I started taking examinations in the UK because this is not a profession where you can just dive into it, and you need knowledge. So I started taking examinations in Chartered Institute of Security and Investment, (CISI) UK and I passed some of the exams and this gave me some of the foundation that I required for this profession. Along the line, I developed passion for it. I also started playing in stocks myself both locally here in Nigeria and also in the UK to understand the market even as a person and as a financial adviser to keep abreast of it.

You worked in the UK before you came to Nigeria. How would you describe your experience working in two different worlds?
Well, the difference in the UK is that it is like an engine where every component has its own usefulness, so as a component part you do your own part, so you are very specialized whereas in Nigeria, you need a holistic understanding of everything because things don’t work perfectly. For instance, when you are trading in stocks in the UK everything is automatic. And once I open the stock broking account, it was just the QYC of the stock broking firm that filled it and everything runs on their account, it was automatic. So how my dividends was given to me was automatic, I didn’t need to go to any registrar to go and fill any form. I didn’t need to be asking my bank about my dividend, everything works seamlessly. But here in Nigeria it is not so. And in fairness to the capital market especially Security and Exchange Commission, they have been trying a lot in the last few years to improve things up to the international standard. With the advent like the e-mandate to ensure that people don’t have to be waiting for cheques, their dividends are credited automatically into their account. But it is not yet perfect, there are little bit of challenges in Nigeria.

Your father was a technocrat before his demise. Now that the mantle of leadership has fallen on your shoulder, how have you been coping as the CEO?
Firstly, let me say that I am grateful to God for the opportunity to have worked with him. It started about four years ago, he was chairman and I was an executive director then. And I learned a lot from him, so that prepared me for this when he passed away. Thankfully, a good name is better than riches, and that name left behind has been very, very instrumental and crucial for us as a company because even within the industry, amongst the regulators, the goodwill that he left is sustaining us. Everywhere we go as you mention the name of the company and him as the founder, we have a very good reception. So that goodwill which is centred around integrity, honesty you can’t put a price on it. Even for this industry, one thing that is very key is having a long term investment. A lot of people want to invest one naira today and by tomorrow two naira, but I learnt from him that it is a long term thing. You don’t take short-cuts.

Having an accomplished father can place a burden of expectations on a child. Do you think you can wear his shoes?
There are expectations, but I will do the one that I can – I guess not in every area because he is a man of many parts, he was involved in so many things. He was involved with the lion’s club, he was also the president of the Institute of Directors, Nigeria, he was also the Nigerian American Chamber of Commerce, and so he was a man of many parts. But I am still young, so maybe I will get to that stage, for now I am involved in some of those institutions, like IOD (Institute of Directors). So with time, but for now we are still very much focused on two things, number one ensuring that our company thrives and we take it beyond where he left it. For instance, a lot of people shy away from stocks for fear of losing their money. We just introduced a package whereby you can trade with N5, 000 a month and as your confidence grows you can do more. This is targeted at students, youths and workers. This is another way of welcoming everyone on board that investing in stocks is good and you can start small.

As an expert in stock broking, what is your overview on the Nigerian stock market?
Let me give you the historical perspective: there was a recession in America at a time, which was equally as bad as the recession we had in Nigeria in 2007 or 2008. A lot of people also lost money, you know the pattern is exactly the same but America is now the greatest economy in the world. It has the biggest stock market. But the truth is that I still believe the market will come back because it is the biggest engine for growth and development for any economy. It is actually a system for mobilizing and allocating capital for any country. Without the stock market I don’t think the economy can effectively grow. So people need to come back, but they need to come back and be safer. As said, stocks are good and it is the duty of stock brokers and financial advisors to guide people appropriately and not just seek their own fees by just dumping anything on people but by advising people appropriately. Because people safe for retirement, to send their children to school and so on and so forth. Obviously I can feel for anyone who has lost money that he wanted to use to retire or send the child to school to go and lose it especially in the kind of proportion we are talking about. When you invest 1 million and have nothing to show can be painful. But at the same time you have stories of people who put 1 million and today it is now 20 million.

How do you rate the performance of the stock market in the first half of 2019?
In 2019 in the first half, at least we have had some encouraging developments; most which I think is the MTN being listed on the Nigerian Stock Exchange. I think that has been the biggest news this year and what it has done for the market, is that MTN came to the market with over 1 trillion naira capitalization. And if you look at the entire market which is about 12 trillion, so if you add 1 trillion to it that is it has lifted the market. And it is a battle that has been ongoing for a couple of years, until they came to the market. So that is a significant achievement for the market. It is also the first telecom company to come to the market, so if anything that in itself must have been a very major achievement or major win. Now, we are also hearing about Airtel. That still shows that there is still hope for the market because these are two major companies and MTN is the biggest telecom company. I think Airtel is the third or fourth telecom company, so if you are having the biggest telecoms company come into the market, it will also lift the spirit of the market or the move of the market. Because the market needs to be picking, there are just over I think 260 instruments available in our market which is not big enough. If you look at South Africa which is just close by us, their market is much bigger than ours. But if we want to call ourselves the giant of Africa, we need to have enough deep in our stock market. There should be enough instruments, credible instruments that are available in the market.

Does that mean the outlook for the second half is brighter considering your analysis?
I think my optimism is a bit tamed; I am not overly excited, just because there are certain things that we need to see the body language of the government is also very key. The first half which was election came and gone. And now that the coast is clear, people want to see what will be different in President Buhari’s second term. It is like first term versus second term. If there is not much difference then there might not be much optimism in the market –because a lot of flows come in through foreign direct investment, which are the foreigners.
Thank God, the CBN Governor, Godwin Emefiele, was appointed for the second time, he has released his own blueprint for the next five years so at least that gives us some direction. For instance, you know what his agenda is going to be: he is going to maintain the currency where it is, try and promote agriculture, and micro loan. At least on that part we know where we are macro-economic level in terms of Emefiele and CBN. But the ministerial appointment may also give us a signal, but the longer it takes the jittery investors become.

Do you see more foreign investor investing more in the second half?
Once again that is also come down to government policy. The way it is, if it continues as they are, well not just government policies, there are also infrastructure issue, when you talk about issue of doing business in Nigeria. That is why investors are now going or looking elsewhere. The issue of investment is a combination of all these factors, so it is not just your policy, the implementation of these policies is taken into consideration, also you road infrastructure, light, security, now we have issues of kidnapping and herdsmen. We have so many issues that don’t make this place friendly at all. So the government needs to create an enabling environment for investors to stay.