Author Topic: 'WHY OGUN IS BRINGING STOCK EXCHANGE TO ABEOKUTA'  (Read 1015 times)

Offline furtune

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'WHY OGUN IS BRINGING STOCK EXCHANGE TO ABEOKUTA'
« on: November 15, 2008, 04:16:05 PM »
'Why Ogun Is Bringing Stock Exchange To Abeokuta'
By Muyiwa Adeyemi

MR. Adegboyega Nasir Isiaka, the group managing director of Gateway Holdings Limited, is one of the professional hands Governor Gbenga Daniel of Ogun State invited to join his administration in transforming the state. Since joining the government, he has proved his mettle by turning around the investment profile of the state. He speaks on Abeokuta branch of the Nigeria Stock Exchange, due to be commissioned on Monday, why people should buy stocks now and the strides of Gateway Holdings.

What is the essence of opening a stock market in Abeokuta?

Opening of stock exchange in Abeokuta is meant to complement the economic agenda of the present administration of the state, which is to make Ogun State the investment destination of choice in this country, if not beyond. Towards that extent, in the last five or six years, the state government has embarked on major projects, either directly or by promoting it with the private sector; in practically all sectors of the economy of the state, the whole idea of this stock exchange was to complement that.

We have had a good success story in the money market and in the banking sector, bringing capital market here will give our people opportunity to buy and sell stocks in the stock market.

Secondly, the companies that are located in Ogun State, privately owned companies, family businesses that are doing very well will have the opportunity to approach market through IPO's and all that. We also expect this to also give our people the opportunity to become aware of the happenings in the capital market and take all the benefits that they need to take from it. In short, it's all within the economic agenda of the present administration to make the state the number one investment destination in the country and we believe that will not be complete unless we have the presence of the capital market in the state. What we are doing on Monday is to open the temporary trading floor and to lay a foundation for the 12-storey building of the Gateway Holdings where on the ground floor we shall have a trading floor. The facilities here will not only attract people from Abeokuta but people from Lagos who will found it easy to come here than Broad Street.

Stock Exchange Commission (SEC) is an establishment on its own, why the state government involvement in this?

What the government has done is to facilitate it. We have gone out of our ways to invite the Stock Exchange Commission, of course, they also see the viability and the need for this facility to be in Abeokuta. Having done that, we also have to provide one or two things just to make it possible and easy for the exchange to be located here.

With the down turn in the market and high level of skepticism among Nigerians, do you think this present time is auspicious for the commencement of this project in Ogun State?

That is true. But there is no better time for people to buy stocks, than now. You notice that in the last three or four months, the prices had going down, we are now, probably at the lowest level, if there is any period to by stocks, it is now, the kind of prices we have now are the prices of five or six years ago. The best thing for any investor is to buy low and sell high. If you are saying the prices, as they are now are the lowest, there are stocks that cannot get lower than they are now, then this is the best time to introduce this kind of facility to the people of Ogun State. There are stocks that if you have bought them about six months ago, the price could have been half by now, having reached that bottom level, no other place to go than to start coming up.

What we have been telling our people is that the important thing is to take necessary advice before embarking on buying stocks. What is happening in stock market is happening in other sectors, be it real estate, foreign exchange, gold and all that. They all have there down turn period. But the important thing is for people to take the right advice and for the people to know that investment is stock market is not a short-term investment.

What lessons have we leant?

One of the lessons is that when you want to go into this market, you go with your eyes opened and take the necessary advise, then watch the market and ensure that you go into the stock that have fundamentals, that is, stocks of companies that have good profiles that come rain, come sun, even if there is crisis of confidence their prices will still go up because, the companies are solid on ground. People must also know the kind of investment they wanted to go into and talk to their advisers, talk to their stock brokers and take necessary advice, once you do this, you should know that even if prices fall, you don't have to develop heart problems, though you will feel bad, but once you have invested in companies with good fundamentals, you know it is a matter of time. It's just important for people to know what to buy, how to buy and when to buy.

As the Group Managing Director of Gateway Holdings, what do you see to the perception that government has no business in doing business?

Gateway Holdings is the investment arm of Ogun State government. And what it does is to act as the investment warehouse and ensure that all the investments of the state are being managed very well for effective management and profitability. But, we do not manage business, we manage investment, or rather our preference was not to manage business but to manage investment. Of course, in all the investments that we have, be it, the one that we met on ground like the Gateway Hotels, which is one hundred per cent owned by the government, or the pharmaceutical company and others which until now are not doing very well.

Total revenue government got from them for over 20 years was under N100 million but liabilities and gratuities are over N1.5 billion. And government does not have the money to put into these hotels for renovation so that they can begin to do well. What we did was to bring private sector into it and get them involved in the area of concessioning, we expect that those private companies would now be responsible for putting capital into the business, turn it around, have a good hotel, and when they do well, we will make our money from the percentage of the turnover they are going to make. The kind of return we expect from those hotels even from the first year is more than ten times all the returns we had from these hotels since they were set up over 20 years ago.

We have done the same thing for the pharmaceutical company; we have done the same thing for the Insurance Company and others. What Gateway Holdings does is just to make sure that all these assets and investments of the state, wherever they are located are well managed. Besides, once these companies are doing well, we would also have achieved one of the cardinal programmes of the present administration, which is employment generation.

There are other new projects that we have got into either directly, using all the various natural resources and comparative advantages of Ogun State. Once we got it on sound footing we invite the private sector to manage the business. Our preference is to promote the economic development of the state by setting up businesses, let it be run here, let it employ people here, let the private sector bring in money and it has been proven that the best manager of resources are the private sector.

You gave clear instances of what you've done to turn round the Gateway Hotels, would you say that Gateway Holdings have generated enough revenue for the state to justify its establishment?

When we look at the gamut of what we do, the only one you can place a figure on, is probably the stock market. And I tell you that is less than ten per cent of our activities. Our activities could be divided into project development wherein we develop new projects and we have the whole lot of that. We also manage existing government-owned business, as I am speaking to you, we are having the final discussion with the staff of the hotels; we want to pay them off, so that the hotel can have the new lease of life. Our projection is that within nine months, these hotels should be doing very well.

When we took off, we started with a stock worth N500 million and got some other resources into it, but as I am speaking to you, despite of the challenges that we have in the stock market, as at today, we have made return of over N2.5 billion to the government, yet we still have stock in the excess of N8 billion. This is possible because of the effective management of the investment. Besides, we also ensure that all the government stocks that were lost, because they were not located at one place, before now, are pulled together for effective management and we have achieved a lot from it. And we have equally tried to resuscitate most of the companies that are not doing well. We have turned round the Towergate Insurance, the Hotel in Ota will soon be managed by an American Hotel chain, also the one in Abeokuta will be managed by another reputable hotel managers ditto for the one at Ijebu Ode.

Apart from this, for the Gateway Pharmaceutical Company, which has been practically dead for the last 20 years, we are working in conjunction with a partner from China, and we expect production to start there before the end of the year. The objective is to make the place a centre for malaria drugs in the coast of West Africa. These are projects you cannot put figures on, but to enhance the economic development of the state.

How profitable it is to invest in Ogun State?

This is number one investment destination in Nigeria. The whole thing to consider are the major advantages that you would get by investing in the state. We pride ourselves, in this country as unrivalled in terms of benefits and comparative advantages for investment. What are the things people look for when they want to invest.

Investors are interested in land and when you are talking of land you need lands that are closer to the good market. So when you look at that, a good market is Lagos State that has the population but the land you can use for that investment is not in Lagos but it is in Ogun and that is the closest to Lagos. Again, investors want natural resources we also pride ourselves to have practically all the natural resources needed for investment.

Talking of human resources, manpower, Ogun State has largest number of universities in both private and public. At the last count universities in Ogun State are not less than ten. From the existing largest sea in Apapa, you probably can get to Abeokuta within a shortest time. Above all, we have a governor that believes and encourages private sector. Our governor always ready to give anything needed for private sector to develop and do business in the state, the reason the state has been transformed from a civil service state to an economically vibrant state.

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'WHY OGUN IS BRINGING STOCK EXCHANGE TO ABEOKUTA'
« on: November 15, 2008, 04:16:05 PM »

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Offline furtune

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Re: 'WHY OGUN IS BRINGING STOCK EXCHANGE TO ABEOKUTA'
« Reply #1 on: November 15, 2008, 04:19:00 PM »
people should take note of Ogun state, in a very short time
she would be so developed cos they keep bringing new things there.

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Re: 'WHY OGUN IS BRINGING STOCK EXCHANGE TO ABEOKUTA'
« Reply #1 on: November 15, 2008, 04:19:00 PM »

 

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