A veteran of the U.S. exchange business has made a triumphant return to his native country to run its exchange as chief executive. Oscar Onyema, most recently an American Stock Exchange executive, was named head of the Nigerian Stock Exchange earlier this month.
Onyema joined the Nigerian Stock Exchange April 4, and his charge is to modernize the 50-years-old mart. Despite its age, the exchange is still considered a frontier market, which makes it less developed than an emerging market. It’s capitalization in equities is roughly US$70 billion through 215 listings.
The exchange boasts a floor, Onyema said, but the trading is done electronically. There is also a marketplace for bonds, but equities are its primary asset class as far as trading volume. Trading volume fluctuates each day between 350 and 550 million shares.
"I’m spending most of my time in Nigeria, but I’ll be in the U.S. and the rest of the world, as well," explained Onyema, a 43-year-old who spent nine years at the Amex—most recently as senior vice president and chief administration officer. He left Amex shortly after NYSE Euronext purchased the Amex.
Currently, he’s overseeing the implementation of a new trading platform. He’s replacing Nasdaq OMX’s Horizon system with another Nasdaq product: called X-Stream. The modernization of the exchange is a two-pronged effort, according to Onyema. The technology aspect is one part, but increased brokerage participation will be important if the Nigerian Stock Exchange expects to make strides as a trading venue.
Essentially, it needs greater depth of book and more overall liquidity, Onyema told Traders Magazine via phone from Nigeria. And greater brokerage participation will be key for a more robust marketplace, he said.
"Any type of automation would be good for them," said Brad T. Desjarlais, head trader at LR Global, a money manager in New York that invests in frontier markets. Although he doesn’t trade the Nigerian market "a ton," Desjarlais said there is a huge lack of transparency there. "It’s very difficult to get market color," he said, adding that spreads are wide and there is little depth of book—symptoms of a market that lacks liquidity. "More transparency and more automation is always a good thing."
Desjarlais thinks that Onyema is on the right track and that a more transparent market would force brokers there to be more responsive to customers. It’s not uncommon to get fills an hour after the market closes, he said.
After graduating from college in his native country in 1992, Onyema marketed IBM UNIX platforms in Nigeria for three years. After that he came to New York in 1996 to attend Baruch College, where he earned an MBA in finance and investments. Before his nine-year stint at the Amex, he cut his teeth in the exchange business at the New York Mercantile Exchange. There he spent four years as an analyst and was involved in business development and strategy.
The Nigerian Stock Exchange is privately held by a group of investors that includes broker-dealers and custodian banks. But the ultimate goal is to bring the exchange public and demutualize, Onyema said. "They are looking to move quickly, so I would say in the next 18 months [the exchange will go public]," he said.
Still, there are sufficient challenges to keep Onyema busy in the meantime. They include bringing in more market maker support for increased liquidity and introducing stock lending, so that investors can short stocks.
As he faces those challenges, Onyema might have the confidence for success in just knowing that getting the job in the first place was a huge accomplishment. Accenture, the global management consultant and technology services provider, ran a global search for the position and there was widespread interest. Onyema beat out roughly 600 applicants for the chief executive post.
