Egwarikhide Longe is a market legend. As a stockbroker, he firmly belongs to the elite group of brokers who command deep market respect.
In that group, you would find Bolaji Balogun, Tony Nwozor, and Bola Ajomale, who incidentally is the founding MD of NASD, the alternative market platform where Longe now serves as MD.
Longe is a man of integrity and a quintessential player in the markets, with a rich career pedigree that includes key roles at Shell CPFA, SECTRUST (now Afrinvest), and AIICO PFA, before moving to the beleaguered NASD.
NASD was formed about 13 years ago, and I remember Mr. Ajomale at the BGL Boardroom going through the motions of setting up an alternative stock exchange for unquoted stocks. Albert Okumagba, the late driver of this initiative, must have envisioned a powerful wealth-creation engine to compete against the near-monopoly of the NGX, then known as the Lagos Stock Exchange.
Sadly, what we have now is a struggling entity. The NASD’s performance pales in comparison to the billions the NGX is declaring under Temi Popoola’s leadership.
So, I asked Longe in a quick phone call: What is the problem? He assures me that things are happening, promising profits at the end of the year and plans to pay dividends.
I believe him, but I take a cursory look at its performance over the past five years. NASD declared losses in three of those five years, and in the two years it reported profits, the figures were below N100m, which is laughable.
What’s the issue? Did Ajomale set up the right structures before leaving for the SEC, where he is now a commissioner? Longe thinks so, citing the challenges of establishing such a platform at that time.
But it’s clear that Ajomale, while brilliant, was not known for business development. His approach to market expansion was esoteric and aloof. His 11-year tenure produced results that attest to this, and Longe’s two-year tenure has shown no sign of radically altering this tepid trajectory.
New investors are growing impatient, eager for a quick turnaround to justify their investments in the face of macroeconomic challenges. A conversation with one aggressive investor revealed his frustration with Longe’s slow pace. He scoffed, “Imagine a company that size declaring a topline turnover of N200m. After deductions, what kind of profit can you expect, and when you factor in the dollar exchange rate, it’s a complete waste of time.”
I agree. NASD has tremendous potential, but it needs to be properly harnessed to give the NGX and the more aggressive FMDQ a run for their money. The investor suggested shaking up the board to bring in fresh talent to give NASD a fighting chance.
However, the NASD is controlled by old-generation market players whose time has passed. The board is dominated by individuals who were active when trading was done by shouting across tables. Some of the names on the board are well past retirement age and should be enjoying their golden years.
Yet, they’ve entrenched themselves with outdated rules that allow them to retain control of the board, overseeing one of the market’s worst-performing entities. Longe described a strange and complicated rotation of directors, where those appointed just last year are up for re-election, while long-time members remain in place. This absurd system is backed by company laws that enable this farce to continue.
The frustration is evident in a fiery letter written to the SEC seeking its intervention, and another letter from a shareholder lamenting the dilution of his holdings through a controversial rights issue.
There have been allegations that the rights issue, which weakened some shareholders’ positions while strengthening others, was poorly handled. But Longe defends the process, stating that it was carried out in good faith and that the major complaint came from someone facing “security challenges” at the time.
From my analysis, this is a fight for value. Some believe Longe doesn’t have what it takes to turn things around, while Longe feels he still has the energy, even at nearly 60, to make it work.
For me, the market is evolving rapidly. While NASD is stuck in gerontocracy, NGX under Temi is thriving with vibrancy. Even FMDQ, which I’m not particularly fond of, is doing good numbers, while NASD reports results that the mallam on my street could achieve selling Indomie and Agege bread.
I like and respect Longe, and if he weren’t the man in the eye of the storm, I might have written this differently. But the potential of NASD, and the broader market, far outweighs my personal feelings. I urge Longe to work with his chairman, another industry veteran, to reform the board, update the statutes, and bring in fresh energy to move the company forward.
Pushing for value means more than just saying “I’m ready to work.” It involves crafting a robust agenda that identifies opportunities and pursues them with relentless focus. If the capacity to do this isn’t there, then it’s time to step aside and let those with the confidence and vision step in.
NASD is like an epileptic child in desperate need of fresh energy and vision. Its current board lacks the capacity and drive to deliver this. It’s time to make bold moves and do what’s right—now.
