In a chat with KEHINDE AKINSEINDE-JAYEOBA, the Group Chief Executive of Coronation Group, Wole Onasanya talks on how to consolidate on the bullish equities market, among others:
RECENTLY, there’s been an uptick in the equities market what can be done to consolidate and sustain?
The things that drive capital markets is generally when people think that the economy is going to do well. So when people believe that the economy is going to grow and benefit the listed companies, then the capital market will do better.
There are many things that affect the capital market. Even when the fundamentals are good, people still believe the stock market is not functioning well, maybe there’s corruption just like what happened in years back when the market crashed. It is important to note that what drives the market isn’t retail investors but portfolio investors that bring huge funds to the market.
When foreign investors believe that the economy will be rule-based and support repatration of their funds, investors will come in to invest.
If the rule was that ‘bring in your money, when you want to take your money out, no problem. We charge witholding tax on your dividends, within three or five days, as long as you’re using a legitimate bank, your money will be settled’ people will come and invest.
Also, if the economy is strong, or people believe the economy would get between in few years, as investment in the stock market is long term.
Considering the state of the economy, what is your advice to investors and what can be done to boost their confidence?
First thing is that be very careful as an investor. Look, relook and relook. Try and get good advice from people that know the company. That’s where stockbrokers can be very helpful. Don’t let people just recommend something for you that they recommend to other person because we are all different.
The capital market is rule-based, like I said earlier. Even when the rules are costing you, stomach it. When you follow the rules as a group, it pays in the long term and builds the investors confidence, assuring the investors that even when it is tough, there’s assurance that they will abide by the rule.
What is your take on the economic policy of the current administration?
I think they’ve started very well. It’s not easy. People are suffering in different degrees. Some are able to handle it more than others. If we look at the removal of petroleum subsidy, we know that the demand for petrol has gone down significantly. For the floating the exchange rate, like I said that rules-based takes time. There’s a cost. What we’re told was that if this thing happens, it’s way too close the gap between the FX rates. We’ll start to get some stability but the reality is that the rates will always fluctuates. There’ll be speculation around the margin.
Now what we hoped that the government does better, is managing the change. Like some of the CNG conversion to natural gas, all those things should have been done in a more concerted way right before yanking out all the petroleum subsidy.
So I think they need to manage that very well and figure out the ways to do it. Get private investment to build more public transportation that are decent. We need trains, busses that are of good quality so that at least the pressure of transportation is reduced.
We have started well, but I think the real test is going to be in not sucumbing to pressure. And trying to be more proactive in trying to see what are the outcomes when you change the policy this way.
Coronation Group Limited was honoured with the Fast-Growing Financial Services Group of the Year at Brandcom Awards 2023 in Lagos, how far have you gone to deserve such?
I think the best way to do that is first to explain who we are and what we do at Coronation. Some people may have heard of our Coronation in one form or another. But I bet you that people will have different views of what we are and there’s a reason for that.
So, you may be aware of Coronation Merchant Bank. You will be aware of Coronation Insurance. Coronation Insurance is what used to be Wapic Insurance. There’s Coronation Asset Management, Coronation Securities, Coronation Registrars, Coronation Trustees. Now Coronation Group is a relatively new company. Were licensed in March this year by the Securities and Exchange Commission (SEC), as a capital markets holding company. What that means is that these different companies I’ve mentioned, most of them, not all of them, are direct subsidiaries, while some of them are affiliates. Like the Merchant Bank and Insurance company, they are affiliates; that means we are related to them in terms of ownership for they are not fully our subsidiaries.
The most important thing is that across all these companies I have mentioned, we are focused on providing financial services solutions to customers.
The way we view ourselves is that we’re using technology to democratise financial solutions, financial services to Nigerians and across Africa. We have an insurance company in Ghana today, also Coronation Insurance, Ghana. So we have two Insurance Companies in Nigeria – Life and Non life.
But what cuts across all these companies I’ve mentioned is that we supply we provide different types of financial services solutions, whether it’s your car insurance, whether it’s your life insurance, your term insurance.
We have whether it’s that hey, I want to start planning better for my family for my future. Start investing in whether it’s stocks or investing,
But as informed we provide all the solutions across the different companies that we have in our ecosystem of companies.
Now, you asked how did we get to do this award recognition? So when a company, a brand is doing all these different things that we’re talking about, and the way we’ve been driving it is through technology. And you will continue to hear more about us in terms of the initiatives that we are pushing. The impact of that is that people start noticing people, people start paying attention to us. They start seeing us in different ways. So it’s all these and our commitment to that mission that is what led to us getting this recognition.
What does this award mean to you?
One, it is good to be recognised for something that you’re doing. What that naturally does is that it encourages you to do more. It helps you to see where you may not have been doing as well as you’would like to or as even maybe what some of your competitors are.
So this brand definitely puts a burden on us in terms of making us more responsible. When someone confers a title on you, you want to make sure that you live up to that or even exceed it. So, our goal will be to get more awards in future, whether there are awards that people call us out for like this one or awards in terms of changing people’s lives. Someone said, ‘Do you know how much I would have lost if I didn’t have that car insurance? Now they bought me a brand new car or replace my car.’ That is an award; that’s recognition and we look to do more of this. That’s what this award means for us.
You mentioned that technology has helped you enlarge your company. Is it an adoption you made as a company or you have partnership with a Fintech company?
So within our own business, we have companies that are focused on building new technologies. Partnership is also a very important part of what we do. So, it is both technology that we build and also partnerships that we develop.
What are the subsidiaries under the group?
That we’re looking to talk more about today, so I don’t reach out to any of them. Well, let me go slow up.
Within our capital markets businesses, we have Coronation Asset Management. What they do is if you want to make investments that are not necessarily in stocks, maybe in funds, you want to get some kind of fixed income you want to buy into, let’s say government treasuries or some bond that someone is issuing, so you can get returns. Coronation Asset Management is the place to go for that too.
We have Coronation Securities, as the name implies, you want to buy stocks, they can help you with that so the stockbroker can do trades for you.
Then we have Coronation Trustees. A Trustee business is one that enables you to have an orderly transition of your affairs. The Trustee also does corporate trustees, which you can do in the event of holding shares on behalf of somebody or the company, you know, those are transactional ones but the example I gave you is on personnel level and you can understand how that can transform life. Like I said, it’s transformative things going on trustees
We have Coronation Registrars. What they do is when you have a company that has shareholders like, a public company, you sell stock, you do this then at the AGM and all those things, they are the ones that manage all that information. The Coronation Capital is a private equity business. That is investments that are not listed. They’re more private. The investments are higher and for a longer period of time.
Under the non-capital market business, we have the Insurance businesses. Coronation Insurance, which is non-life insurance business, and Coronation life Assurance, which is a life insurance business. We have Coronation insurance, Ghana. We have three insurance licences, two in Nigeria, one in Ghana. Then we have Coronation Merchant Bank. The Merchant Bank, is largely for trade. So it is not for retail customers, it is for high net worth customers and for companies.
We have customers that want to trade or want to import something, the correspondent bank needs the letter of credit, and then also for high net worth customers. We also have Coronation Technologies. This is like an internal business which build building technology across all our subsidiaries and affiliates. We have Trium, this is our FinTech builder.
What are the things you are doing to consolidate on these feats?
We already do some things differently. So number one, the Coronation Capital Markets Holding Company license from SEC was in March.
We’re one of the few that have that designation. So what that does is it puts more regulatory oversight over what we do so we’re not operating the dark. So, what we plan to do more of investment in technology.
We’ve done a lot of things in the dark, meaning that we are just coming up. The roots have been planted, by January, you start seeing more leaves, some of the flowers, those that have been closer to us, they know these things. The public at large, is just getting to know them. You will start to see the launch of our software solutions that carry our name. You’ll start to see financial services products that are innovative, products that will make customers lives better.
Some of them will be first of it’s kind in Nigeria. You will see that by God’s grace by the first quarter of 2024, you will start to see more this kind of thing. There has been a lot of work, a lot of investment put into the building and then the fruits will start to come out more next year.
How are you driving financial inclusion in the country?
When we say financial inclusion, the first thing that comes to mind is having a bank account, because that’s like the first level. Well, having a bank account is something it doesn’t necessarily make you wealthy, it doesn’t protect you. So financial inclusion, as an example, is finding a way to get insurance.
what would you buy, just let the market your job is to go to the markets every day to sell. If you are sick, I unable to sell nothing for you. No money. If you get to market today, the market has flooded and customers are able to cough last loss of revenue.
One thing most people don’t realize is that there are financial produce that can use to protect that loss of income.
So financial inclusion for us using insurance as an example is enabling people at the lowest level because they contribute a lot to our economy. That’s most of Nigeria by the way. Is making insurance accessible for them, that they can easily buy that product but affordable.
So the work we’re doing is ensuring that majority of Nigerians can benefit from information about insurance, growing wealth, etc. We make the information accessible and understandable.
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