AMCON says no more intervention fund for stockbrokers

 As prices of equities continue to plummet on account of the recent lull in the stock market, the Asset Management Corporation of Nigeria (AMCON), yesterday, said it was not considering another bailout for stockbrokers in line with recent calls by the stockbroking community.

The corporation also assured that being a key shareholder in the market, it was ready to work with the Nigerian Stock Exchange (NSE) to deepen and make the market more professional as well as ensure that it bounced back in the interest of all stakeholders.

Managing Director of AMCON, Mallam Ahmed Kuru, made the disclosure when management team of the corporation paid a courtesy visit to the NSE to sound the trade closing gong.

Recall that the stockbrokers through their umbrella body – the Chartered Institute of Stockbrokers (CIS) and the Association of Stockbroking Houses of Nigeria (ASHON), had called on the Federal Government to create an intervention fund of about N200 billion to be accessed by market makers to shore up the market and stop it from further decline.

Speaking through the Acting President of the CIS, Oluwaseyi Abe, and ASHON chairman, Mr. Emeka Mmadubuike, the stakeholders said each market maker should be availed between N1 billion and N10 billion to help them carry out their functions effectively.

However, while responding to questions, yesterday, at the end of the closing gong ceremony, Kuru said forbearance for stockbrokers was a closed issue.

In his words:  “The issue of forbearance has gone; this is not the time for forbearance. This is the time for businesses to come back. This is the time for businesses to work properly; this is the time for us to put proper corporate governance practices in place so that businesses don’t survive on the basis of supporting, but on basis of dynamics of those businesses.”

He continued: “AMCON was set up to buy non-performing assets from financial institutions and in those assets, we do have quite a lot of margin loans. Today, outside the energy sector, our holdings are highest in equities. That means that we have a lot of interest in what is happening in the Exchange. And you know recently, the Exchange has not been doing very well, which means that my balance sheet is also going down. So, AMCON as a resolution company will do everything possible within the ambit of the law to support the management of the Exchange.

“Margin loans represent very high proportion of equities we are holding and unfortunately because of deprecation in the Exchange, there is a very wide gap which necessarily we must pray that the market picks up so that we close the gap.”

On when the financial institutions bailed out by AMCON would come back for listing on the Exchange, he said: “To come back to the Exchange to be listed does not have anything to do with us or the management of the Exchange. What we try to do is to look at the underlining businesses, how to make the business to come back to life. Once the business has been revived, it is now left for them to apply to the Exchange whether they will allow them to start trading their shares.”