What has been the impact of the PEARL Awards?
The impact of PEARL Awards on the nation’s economy can be understood from the perspective of the objective of the awards itself. Firstly, the PEARL Awards is to award quoted companies for outstanding performance in excellence and over the years I must say that by the nature of the awards and the categories, we have competitions within sectors under the sectoral leadership award category and you also have for the entire market under the market excellence category.
One impact that has come up is that every year companies that are quoted on the stock exchange look forward to emerging first as nominees and secondly as the ultimate winner of the sectoral leadership awards and also the market excellence awards. Why this? Simply because the company that emerges has made a point that it is the leader of the market. In terms of impact on the stock exchange, there is a situation whereby companies that win these awards, their share prices begin to go up immediately after the awards because the PEARL Awards has become a reference point.
Secondly, it has become a guide for investors to know which stocks to invest in. So, by winning these awards, both potential and prospective investors are comfortable to stake their hard-earned money on winning companies, thus helping to improve on their returns to stake holders. Another objective is to enhance returns in terms of dividends and script issues to investors so when a company wins this awards, it shows that it is performing better and it can also enhance its share prices. Again the awards set out to create awareness and visibility for the capital market. Before the advent of the PEARL Awards, the stock exchange was seen as an elitist market and you will now realise that consequent upon PEARL Awards along with some incentives and initiatives by the regulatory authorities, the capital market has become everybody’s market. You will find out that even an average vulcanizer, a market woman and everybody knows that even with N5000 you can buy shares while the initial impression has been that you need up to a N1 million or N500,000 to access the capital market. So, I mean in all these areas we have been able to impact not only the market but the economy and of course we continue to engender healthy competitiveness among quoted companies, no wonder when these companies win the awards you see that at their annual general meetings, in their financial reports, even when they want to make public offers they indicate gleefully the fact that they have emerged winners at the PEARL Awards.
What are the categories and criteria for the awards?
Well, the PEARL Awards is the performance, earnings and returns leadership awards, that’s the acronym. That is why we ensure that these awards are based on verifiable indices, verifiable fact and figures that have been made very open and this is what has separated PEARL Awards from other awards. PEARL Awards stands in a world of its own and not only do we make it to be empirically open on how the leaders emerge; we also publish it publicly at every award nite in the publication called the “Nigerian stock market annual” with graph and charts stating how each of the nominees and winners emerges. We are actually focusing on the capital market; however what we have done was that we arranged a category that we called the Special Recognition Category Honorary awards. We have the Capital Market Journalist of the Year award because these are partners that are contributing to the development of the capital market, We have the media institution for capital market development, then we have the special recognition award for capital market development and the outstanding CEO of the year award. Beyond that, the board of governors has approved this year that effective from next year we are going to have an award for good corporate governance. So these are the areas we are looking at and may be in the nearest future we will be looking at awards for stock broking houses, capital market registrars and other players in the capital market.
Beyond the figures, what other things do you take into consideration in the awards?
One of the things we have put in place is to ensure that companies that would emerge as nominees comply with the requirements of the stock exchange. We ensure that if a company for example has put in for delisting voluntarily from the capital market, we ensure in that case that such a company is not qualified to be assessed for that particular year’s awards. Beyond that, we also ensure that as much as possible we comply with everything related to good corporate governance in ensuring that companies that emerge are not found wanting. We ensure that we do not have sentiments or probably biases in deciding which company emerges the winner of the award. And again for a sector to qualify it must have at least five listed companies that have submitted their annual reports with the stock exchange competing in that sector. So these are some of the additional guidelines that we have put in place.
What will be unique about this year’s awards?
There are a number of developments that will be unique in this year’s awards, some of these things we normally would want to keep to us because the element of surprise itself is part of the thrills and frills for the awards night. We have the customised PEARL Awards plaques that have been specifically made for PEARL Awards Nigeria. We also have quite a number of people that are gracing this year’s awards night. For example, General Theophilus Danjuma has confirmed to be the chairman of this year’s award, for the first time ever, we are having a royal father of the night, the Oba of lagos, we are expecting the CEO of the Nigerian Stock Exchange, we have governors that will be gracing this year’s award night and the Speaker of House of Representatives is the special guest of honor. We are looking at a bigger and better PEARL Awards this year.
Besides the awards panel, does the public vote count?
Analysing performance of companies is a professional work and what the PEARL Awards has put in place is a structure in process whereby we have what we call the research and collation sub-committee of the central working committee of the awards, which gathers its data from financial reports. The research and collation committee passes its drafts report to the technical committee of the board of governors which is headed by a past director-general of the Securities and Exchange Commission (SEC). This year we had earlier considered looking at public vote in determining the winner; however at the board level it was decided that for now it might not be advisable because the members of the public might not have all the information required and we do not want to jeopardise the hard-earned credibility of the awards.
How can we strengthen the market development?
The important thing in strengthening the market and deepening the market is first to have each stakeholder plays by the rules-the operators, the regulators, the shareholders associations and individuals. Every stakeholder has his or her own responsibility. For example the regulatory authorities need to put in place policy that would engender investor confidence and market integrity, the market players themselves, the operators, should ensure there are no insider dealings so that we would not go back to the days of 2008 where we had a market burst. Shareholders should ensure that they do not bring the element of greed but invest based on information and available fundamentals, investors should seek professional advice and should not buy because people are just buying shares. So I will say that there is a need for every stakeholder to play by the game. Beyond that, the government needs to provide the enabling environment, a situation for example where for the whole of this year there was no budget for the Securities and Exchange Commission to regulate the market is not acceptable.
What are the incentives to encourage investors?
One, there should be regulatory credibility, there should be creation of awareness, that is, enlightenment programme to build investors confidence once again and we should look at creating more products in the market and, finally, I think it is necessary to look at cost of acquiring shares in the market.
Do companies pay for PEARL Awards after being awarded?
We don’t request for any companies funding and even after you emerge, we don’t ask them to pay for their awards and that is why we are able to publish not only the criteria but the fact and figures of how every nominee emerges.
What is your advice to quoted companies?
My advice is that they should continue to explore innovative initiatives to be able to remain on the cutting edge. The companies should continue to play by the rules of the games, explore innovative initiatives to remain on the winning edge and of course to the investors, I want to say that the capital market is a place to be, it is a market for the long-term not the short-term. While you can play the market for short-term games, the ultimate actually is the long-term market and of course people should not be worried about what happened in 2008, the capital market remains the ultimate destination to continue to keep wealth for the average investors.
What is the prospects for new listings in the market?
The opportunities in the capital market are enormous. I will advise growing small and medium scale enterprises to come to the market, the telecommunication companies of this world should come and get quoted on the stock exchange, I would encourage the oil and gas, even in the upstream sectors apart from the petroleum marketing that we have in the market, to also get listed. Nigerians should benefit from the profit that is coming through the capital market.
