Capital Market, Postal Industry Joint Efforts Crucial for Economy- Uba

The Capital market and postal industry collaborations are crucial for the nation’s economic development says Mr. Okey Uba, managing director and chief executive officer of Ebony Express Limited.

Uba made the remark while presenting a paper titled, “Postal Industry and Capital market: A Synergy for Wealth Creation”, at Bulk Post Annual Customer Forum/public lecture held in Lagos on Monday.

He said that the ultimate role of the capital market is to raise fund for both Government and Companies through investments in securities by the public.

While carrying out this role, he said, securities documents are generated including public offer forms, share certificates or lodgment notices, annual reports, dividend warrants or dividend credit advise, rights circular, share transfer forms, among others, which require delivery.

Thus, the capital market operators engage the services of the postal industry to collect, convey and deliver these documents to shareholders.

“In all, the common gain from this activity of the capital market operators and the postal industry is wealth creation for the investing public,” he alluded.

But he argued that in recent years, there has been a sharp decline in the production of these documents, especially annual reports and notices of extra ordinary and rescheduled meetings.

The development, he said, is threatening the hitherto cordial and profitable relationship between the two sectors. 

According to him, the onus lies on the Capital market operators and their regulators to adhere to the set guidelines by producing the necessary documents due to the least shareholder in the most accessible terms.

Uba’s assertions where convoked by incessant claims among courier operators and shareholders that the securities and exchange commission (SEC) and capital market regulators seem to overlook the adherent to certain rules by companies in the dealing with their shareholders, especially in cutting down on number of annual reports and notices printed or produced in digital compact discs (DVDs). 

As such, capital market and sub-sectors have continued to witness decline in patronage, but the Guest Speaker believes that adhering to standards will help to halt the decline in capital market mails, and rebuild the much desired confidence, by the investing public in the Capital Market.

He said, “The Postal industry, conversely, should strive to meet the challenges of effective and efficient delivery of such documents to the shareholders. Socio-economic development of a nation demands interdependence of industries. No industry operates in isolation; else the principle of redistribution of wealth be truncated; when this happens, companies will go into extinction with resultant loss of jobs.

“The effect of general loss of jobs in an industry on the society, especially on security is better imagined. This explains why developed economies, with near perfection in ICT, deem it plausible not to completely demateralise their capital market documents”.

He added that information and trust are key factors for the growth and survival of a business hence the relationship between the capital market operators and investors is maintained with effective information dissemination.

“This information is bellied by physical documents delivered to the investors by the postal industry,” he said.

He said, whilst documents like share certificates and dividend warrants can be dematerialized, annual reports and meeting notices is better materialized as they are avenues through which shareholders/investors, their proxies and indeed the general public keep abreast of development in quoted companies.

Earlier, Bayo Olugbemi, managing director of FirstRegistrars and Investor Services, urged the courier operators to gear up their operations in line with international best practices.

According to Olugbemi who chaired the occasion, it has become obvious that courier operators cannot depend wholly on capital market documents for delivery hence the market is passing through a phase that will affect other operators dependent on it.

He cited the e-dividends and e-annual reports as part of measures by companies to cut costs as the hash economic environment impact their operations too.

According to him, apart from devising means to carefully handle the DVDs at their disposal for delivery, the operators must think outside the box to leverage opportunities in other areas like the ecommerce delivery, bulk email/digital marketing, among others.