The Chairman of Fidelity Bank Plc, Mr. Mustafa Chike-Obi, has emphasized that securities and margin lending could significantly enhance trading volumes in the Nigerian capital market. He made this statement during his investiture as a fellow of the Chartered Institute of Stockbrokers. As the pioneer chief executive officer of the Asset Management Corporation of Nigeria, Chike-Obi expressed his commitment to collaborating with the institute to revive discussions on margin lending within the Nigerian capital market.
Chike-Obi stated, “With margin lending, the Nigerian capital market, alongside its recent achievements and regulatory improvements, can experience a resurgence. Margin lending will not only increase transaction volumes but also create hedging opportunities and value propositions.” He cautioned that without these advancements, the market risks remaining stagnant. He noted that margin lending is relevant not only for equities but also for debt instruments. As an honorary fellow, he pledged to dedicate his time and efforts to support the market, asserting, “We shall make sure that margin lending becomes a reality in Nigeria within the next two years.”
The statement further explained that margin lending offers liquidity from the cash side and was once popular in the Nigerian capital market. However, it was suspended due to misuse by some market operators. In contrast, securities lending involves loaning shares, bonds, or derivative contracts to other investors or firms to enhance liquidity. Chike-Obi also shared that one of the significant challenges he faced as CEO of AMCON was addressing debt in the financial market, which necessitated finding a swift solution.
Meanwhile, the President of the Chartered Institute of Stockbrokers, Mr. Oluwole Adeosun, praised Chike-Obi for being a deserving recipient of the honorary fellowship. Adeosun remarked, “Mustafa Chike-Obi has the perfect foundation to succeed in the capital market.” He noted that the governing council of the Chartered Institute of Stockbrokers had previously decided to admit individuals who have distinguished themselves as exceptional professionals worthy of being stockbrokers into their membership community.
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