‘Nigeria has potential for leading frontier market with right liberalisation efforts’

Layi Olaleru, CEO, RMB Nigeria Stockbrokers speaks about the firms operations in Nigeria and outlook for 2021.

Give an overview of the relationship between FirstRand and RMB Nigeria Stockbrokers

RMB Nigeria Stockbrokers is a subsidiary of the FirstRand Group, the largest listed Financial Services Group (by market capitalisation) in Africa. FirstRand established the business in Nigeria in 2013 through a merchant bank, RMB Nigeria. To further its long-term vision of being an end-to-end financial services provider, FirstRand then expanded operations into a brokerage business in 2017.Currently, the brokerage business provides a unique platform for our domestic and foreign institutional fund managers to invest in Nigerian equities and achieve their desired fund objectives.

Tell us about RMB Nigeria Stockbrokers services & clients

RMB Nigeria Stockbrokers offers services to both domestic and international investors. Our clients include pension fund administrators, asset managers, insurance companies, offshore funds investing in frontier, emerging and sub-Saharan Africa markets, and sovereign funds. Our services include efficient execution of trades, post-trade services, market insights and research.

What is the Nigerian market outlook for equities in 2021?

The global economy is projected to grow by 5.5% in 2021 on the back of the successful rollout of COVID-19 vaccines, additional fiscal stimulus support coming from economies like the US and Japan, continued observation of social distancing, reopening of businesses and increased consumer demand. The Nigerian economy is also projected to return a positive growth of 1.5% during the same period. Going by the strength of the tailwinds, we remain overweight on equities, largely due to a dearth of alternative investment assets with returns likely to be superior to inflation (currently at 17.33%) and the projected recovery of the global economy. Less compelling valuations and our meagre GDP growth expectation taper our 2021 base case ASI returns expectations to c.12%.

How would you rate the Nigerian equities market compared to mature, emerging, and other frontier markets?

The Nigerian equity market is quite different from other frontier markets particularly in the African continent due to its advanced trading platforms and products, and market capitalization. In addition, the relatively low equity market capitalization to GDP (c10%) indicates significant headroom for growth and development. The market could easily develop into the leading frontier market with additional trade liberalisation efforts and more alternate investment instruments such as derivatives and commodities.

What makes RMBNS distinct from other stockbrokers in the market?

Our desire to offer excellent investment advisory services, best execution and quality research leveraging the global reach of the RMB Morgan Stanley joint venture and the FirstRand Group makes us stand out as a broker of choice.

RMB has successfully built a world-class stockbroking franchise in South Africa via a joint venture partnership with partner Morgan Stanley. RMB Morgan Stanley has consistently maintained its top ranking on the Johannesburg Stock Exchange (JSE) in the last few years, by being strategically focused on best execution, strong access to corporates, an innovative product offering and active participation in primary market deals.

Drawing on lessons learnt, including best practices, RMB Nigeria Stockbrokers has a unique advantage to and is able to compete favourably. We are able to harness the compelling RMB Morgan Stanley experiences and strengths and bring it to bear in our innovative product offerings and services in the Nigerian market.

What is your goal for RMB Nigeria Stockbroking over the next five years?

Our goal is to build a leading stockbroking firm that will provide investors (domestic and international) best in class trade execution services, equity sales distribution, strong corporate access, distribution of primary market products and a highly rated Sub-Saharan Africa research offering.

RMB Nigeria Stockbrokers prides itself on having an experienced and top performing team focused on providing solutions to our clients. Their work is underpinned by a sound knowledge of the Nigerian and African equities markets.

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