CFA Society Nigeria - Quarterly Society Update - March 2013

SNOEWCIEQTUYAURPTDEARTLEYDear Members, Second Quarter, March 2013 Get involved!We are delighted to present our first Society Update Newsletter. Would you like to: Help the advocacy committee shape the futureBeginning with this issue we intend to provide quarterly updates of the society’s of the Nigerian investment climate? Plan thisactivities, planned events and general information we hope you will find useful. year’s official launch with the programming committee? Build a social media/communicationIt has been an amazing journey, starting from the setting up of Society Of Invest- strategy with the publicity team? Help the mem-ment Professionals Of Nigeria (SIPON) in 2008, to becoming the 137th CFA bership committee create a Job Board? Get inSociety globally (and the 4th in Africa). We are very excited to confirm that we touch to find out how you can get involved. Wehave finally completed our CAC registration, opened or bank accounts, and are look forward to hearing from you.now able to (finally!) get on with the business of building a CFA Society Nigeriawe can all feel a part of, and be proud of. CFA Society Nigeria Events: March-June 2013In this issue, we share with you two Board members’ experiences at the recent CFA Society Nigeria LaunchEMEA leadership conference, share the progress Nigerian candidates and June 2013charterholders have made in “The rise of the Nigerian charterholder” , update Watch this space for more detailsyou on our recent advocacy activities, provide a preview of the next quarter’slocal and global events, and much more. Did you know……….Our intention is to create a meaningful membership experience for all our mem- The 4 CFA Societies in Africa are in, Egypt, Mauri-bers, and to ensure all our members are aware of the local and global resources tius, Nigeria and South Africa?available to them through the CFA Institute.Our ultimate goal, as described by our mission statement is ‘To promote the The CFA Institute’s mission is ‘To lead the invest-highest standards of investment practice in Nigeria and provide a vibrant ment profession globally by promoting thecommunity in which CFA members can interact and grow’. highest standards of ethics, education, and professional excellence for the ultimate benefitWe would love to get feedback from you on how we can achieve this, and how we of society’?can make your membership experience more meaningful. The CFA Institute publishes a list of industry relatedI hope you enjoy reading our newsletter. sanctioned members, candidates and charterhold- ers under the Professional Conduct Program?Okey Umeano, CFAVice President, CFA Society Nigeria (on behalf of the membership committee) On the 18th of March, the CFA Institute launched a global initiative, ‘The future of Finance’ aimed at shaping a trustworthy, forward thinking financial industry that better serves society? Write for us Putting together this newsletter is not as easy as it looks. If you’re interested in helping us make it better, please get in touch.

Meet: The President Can you tell us about the president of CFA Nigeria Society? Upcoming CFA Institute events My name is Folasade Odunaiya. I studied computer science & CFA Institute/ University of Virginia economics at the Obafemi Awolowo University, Ile-Ife, where I Darden School of Business: Behavioral graduated in 1985 with a first class honors degree. I am also a Finance: From Theory to Practicemerit award winner of the Institute of Chartered Accountants of Nigeria. I served with 7 - 10 April 2013Shell Petroleum Development Company and started my professional career in the audit Charlottesville, Virginia, United Statesdepartment of Arthur Anderson. Topic: Behavioral Finance CE Credit: Qualifies for 14 CE creditsIn over seven years at the firm, I led a number of audit and business consulting en-gagements for top banks and financial services companies in the country. I decided to 2013 Asset and Risk Allocationleave Arthur Andersen in 1993 as a Manager in the Banking and Financial Services 15 - 16 April 2013group to form IBFC Limited (Business & Financial Consultants) with a few friends to New York, New York, United Statesfocus on consulting, company valuations and financial advisory. After a number of Topics: Alternative Investments | Economicsyears, IBFC merged with the consulting business of Agusto and Co. to form Alliance | Fixed Income | Portfolio Management | RiskConsulting. I managed the training business for 3 years and went back into consulting – ManagementHR related for recruiting finance people, strategy and risk management. I was awarded CE Credit: Qualifies for 11.5 CE creditsthe Chartered Financial Analyst charter by the CFA Institute in 2000. 66th CFA Institute Annual ConferenceSo why did you decide to write the CFA examinations? 19 - 22 May 2013 The Sands Expo and Convention Center atTo be honest, it was curiosity and need to keep my brain ticking. After years of working, Marina Bay SandsI felt the need to find something intellectually stimulating to do. I regularly joked that no Singapore, Singaporeone should ask about my results because I paid for it myself. Topics: Alternative Investments | Behavioral Finance | Economics | Equity Investments |Can you tell us your CFA exam story...what’s your best memory, toughest exam? Fixed Income | Portfolio Management | Private Wealth Management | Risk Manage-The easiest exam was definitely level 1 for many reasons. First, I was a chartered ment | Standards, Ethics, and Regulationsaccountant which made the FRA portion easy for me. Second, ethics was simplified (SER)because I had worked with Arthur Anderson where I had to fill an annual self declara-tion form and abide by so many of those rules already, so it came as second nature. CFA Institute/EDHEC-Risk Institute:The most challenging was level 3 because constructing a portfolio using derivatives Advances in Asset Allocation Seminarwas quite strange. 4 - 6 June 2013 London, United KingdomI didn’t travel a lot for exams because of family. I took one exam in Lagos at the USIS – Topics: Portfolio Management | Quantitativeonly two of us wrote the exam there that year in its library. There was a problem Methods | Risk Managementthough, CFA exams are written simultaneously across time zones, but the exam day CE Credit: Qualifies for 20 CE creditshappened to fall on an environmental sanitation day, which we unfortunately onlyrealized a week before the exam. We called the USIS and they asked us to come out Exam Memoriesimmediately after the sanitation. Obviously, no other exam has been taken in thecountry since then, although we are looking to change that. The other exams I took I took level 2 in Hong Kong, where I was the onlywere in Ghana and at that time, the total number of candidates was about 40 across all African out of about 8000 candidates and got solevels. many looks that I could practically feel pin pricks on my skin from the number of eyeballs lookingAny weird study habits you would like to share? at me. The proctors would, every once in a while, smile and wave vigorously at me (probably toI never read the summaries or study packs. I bought the books because I knew they’ll make me feel more comfortable), but it madebe relevant in the future. Ikoyi club was my second home on Sundays. I took the kids me feel a little bit like I was a circus character :-)there to swim all day after church and went to the library to get a few hours of good … Okey Umeano, CFAstudy. I also had a habit of hitting the books at the hairdresser’s too. I fondly remembermy hairdresser asking why I read so hard when I didn’t look like I needed to be reading. I remember going to the UK for my level II exam.I just had to make use of every little time I had because I had young kids to take care On arrival at Heathrow I discovered the airlineof. did not bring my luggage. I literally had to prep without my CFAI books. Fortunately I had a jotterFrom your point of view, what are the ingredients for passing the CFA exam? and a friend who was writing the exam. Guess God works in mysterious ways, we both passedAn early start is advisable. Also, I’ll say discipline, focus and smartwork – how much and I have forgiven the airline. Lol.. Uwayou assimilate within the time you have to read - are essential. Daily practice helps to Osadiaye, CFAretain concepts you learned while studying. Do you have an interesting exam memory toProfessionally, do you think the CFA charter has helped you? share, or strange habits you developed to pre- pare for the exam? Write us!Definitely, for those who recognise the charter, it places you at a certain level. Thereare certain levels of ethical standards and work that are expected of you. It also helpsyou to understand the market better and to be more professional. The body of knowl-edge is very useful as I give advice to people even though I don’t manage a portfolio. Ialso teach a lot and there’s a sense of fulfillment when you are able to pass knowledgeacross to students.What’s the aim of CFA Society Nigeria?It’s basically to propagate the CFA values in the country via this society. To achievethis, we are running with the mission statement of the CFA, which translates into the ‘4Es’ (areas of focus) -Education, Engagement (advocacy), Ethics (to get memberfirms to adopt these ethics as part of their institutional code, and the investment com-munity as a whole to imbibe the ethics as much as possible), Enablers (Financialstrength, global talent and operational excellence). 2 Copyright © 2013 CFA Society Nigeria, All rights reserved.

The rise of the Nigerian CharterholderIn 2012, 10,903 new charters were awarded globally in recognition of their demonstrationand commitment to professional ethics and expertise with the broad range of skillsneeded for competitive careers in the investment profession. This represents a 22%increase from the previous year and a 44% increase from only a decade ago. Distributionof these new charters was largely skewed towards the Americas, with 48% given tocandidates from that region. Europe, the Middle East & Africa (EMEA) and Asia Pacificmake up the balance with equal proportions of 26% each.View point from AfricaAfrica’s interest in the charter is definitely on the rise, spurred by an African determina-tion to have a meaningful position in a rapidly globalizing financial economy. Historically,knowledge, technology and skills have proved necessary inputs for growth and adequatecompetitiveness and it is against this backdrop we believe African candidates nownumber in thousands to earn the right to use the charter.That said, recent stats show an increased competitiveness by African candidates whichrepresented 14% and 3% of EMEA and global candidates respectively in 2012. In myview, the African Charterholder may well see its representation rise from a mere 7.6% ofEMEA and 1.5% of global Charterholders in the not too distant future.A Nigerian interpretationNigeria in particular has attracted a significant candidate boom of late, with the inquisitiveand ambitious locals aiming to standout or rather excel at their professions of choice,raising participation levels in the program. With high unemployment levels, few ade-quately skilled professionals and a small pool of highly lucrative job opportunities, itwould appear that the charter is quite beneficial, as it gives its holder a slight edge overthe rest.The factsThe first Nigerian charter was awarded in 1994, and it seems Nigeria has come a longway with 62 charters awarded since then. Over the most recent 5 years when just 4charters were awarded to Nigerian candidates in 2007, the growth has been consistent -up by a CAGR of 30% - except for a minor blip in 2010, when there was a minor declinein new awardees. 2012 marked the highest charter awards for Nigerian candidates with15 new Charterholders, underscoring the recent surge of CFA Charterholders in thecountry.Nigeria vs. AfricaOne question which you may like answered is, how is Nigeria really doing versus Africancountries in the quest for finance’s gold standard? Well for one, there certainly is pro-gress and forward movement across the continent. However, growth in Nigeria is outpac-ing the rest of Africa and may be expected to continue towing that line in the foreseeablefuture.Compared to Nigeria’s 5-year CAGR, other countries are relatively lower. For example,Egyptian charters grew 25%, Kenya 22% and South Africa saw a rise of 6% for the sametime period. To substantiate this view, Nigerian Charterholders account for only 4% ofthe African charters, however 16% of candidates from the continent are Nigerian (16%level 1, 18% level 2 and 14% level 3). This could mean that interest in the program issupported by higher success rates and should result in an increased number of CFACharterholders in the short to medium term.The tale however is slightly different when considered in absolute terms. South Africahad 140 charters awarded in 2012, clearly distinguishing itself as the clear African leaderin the CFA program. Egypt,15; Kenya, 11; Zimbabwe, 6; Uganda, 3; Ghana, 2; Zambia,2; Botswana, 2; Namibia, 1; and Tunisia, 1, make up the African numbers.Data Source: CFA Institute websiteUwa Osadiaye, CFA 3 Copyright © 2013 CFA Society Nigeria, All rights reserved.

Advocating Change: Our recent involvement on the CISI billThe Chartered Institute of Stockbrokers (CIS) recently submitted a new Bill, sponsored by the former chairman of the Senate Committeeof Capital Markets, Mr. Solomon Ganiyu, aimed at establishing a new body - ‘The Chartered Institute of Securities and Invest-ment’ (CISI)- which proposes to transform the CIS from a trade association for stockbrokers into an overall financial markets regulator.If passed into law, all “securities and investment” professionals would require authorization from the CISI to conduct their respectiveactivities. Expectedly, the Bill has been met with stiff opposition from across the local financial spectrum. Our Advocacy Committee hasbeen actively involved in these engagements, formally asking the Senate Committee to reject the Bill as drafted.CFA Society Nigeria, in its memorandum to the committee, stated that while we are not opposed to the concept of an umbrella body forthe securities and investment industry, we are opposed to the unilateral transformation of the CIS into such a body with virtually no priorinput or contribution from the rest of financial markets community who constitute a much more diverse and systemically significant groupthan the CIS itselfThe CFA Society Nigeria also raised concerns on the intended status of the proposed body, highlighting a lack of clarity as to whether itwas proposing to be a regulator, thereby duplicating the role the Securities & Exchange Commission plays, or whether the proposedbody would stand as an industry Trade Group. View the full memorandum submitted by CFA Society Nigeria to the Senate Committee. 4 Copyright © 2013 CFA Society Nigeria, All rights reserved.

The EMEA Regional Leaders Meeting of the CFA Institute held in Milan ,ItalySaturday, 2 March 2013The CFA Society Nigeria (“the Society”) had its inaugural representation amongst the EMEA (Europe, Middle East and Africa)member societies in Milan, Italy at the regional meeting held between February 28, 2013 and March 2, 2013The Society was represented by the President, Sade Odunaiya, CFA and the Secretary, Sola Ojelade, CFA. Attendance was fromabout 40 Societies in the EMEA Region and the CFA Society Nigeria was introduced as the latest Society to be added to the EMEARegion.Advocacy: a major focus of the CFA Institute.In order to underscore the importance of Advocacy as an important activity area for the CFA Institute, a whole day (Thursday,February 28, 2013) was devoted to discussing advocacy issues.These sessions were attended by Advocacy Committee Chairmen of the member societies and ideas were exchanged with regardsto Societies’ experience along the lines of Regulatory / Policy, Media and Industry Outreach, Internal Communications Advocacy.Advocacy Committees were enjoined to achieve the following four goals at the minimum: Get the Committee organized Promote the Asset Manager Code of Professional Conduct to 6 Local Firms (more on this below) Deliver the Global Market Sentiment Survey Report to local members & media Attend the Regional Advocacy Workshop and, amongst others, Meet with Regulator – Introduce Society and CFA InstituteThe Advocacy Committees are particularly encouraged to develop a strong working relationship with financial journalists and thefinancial press in general.Members are advised to emphasize the “independent nature” of the Institute with the singular objective of ensuring that investors’interests are supreme and that the Institute is not a Trade Lobby.Other key headline discussion points at the two-day regional meeting were: Membership Structure Introduction of key new Initiatives of the CFA Institute viz:  The Future of Finance Project  The Claritas Investment Certificate  The Asset Manager Code of Professional ConductThe meeting provided the team with an opportunity to network with other Society Leaders especially those who have had experiencein the areas of interest to us such as the University Research Challenge amongst others. It also provided a forum to present theneed for a CFA Institute exam centre in Nigeria as a means to further promote the charter. We were advised to write on the issueand that the situation will be reassessed. View the team’s full report on the conference. 12 3 45671. L-R: Sola Ojelade, Secretary, CFA Society Nigeria; Sade Odunaiya, President, CFA Society Nigeria; Patricia Kiwanuka, CFA Society Kenya; Phillip Bradford, CFA Society South Africa.2. Delegates at the CFA EMEA regional meeting in Milan. 3. L-R: Norman Fon Sing and Nousher Sait, CFA Society Mauritius; Sola Ojelade, a delegate, Sade Odunaiya, Patricia Kiwanuka and PhillipBradford.4. L-R: Sola Ojelade, Beth Hamilton-Keen, CFA Society Canada; Sebastian Seitz, CFA Society Germany. 5. L-R: Sola Ojelade, Sade Odunaiya and Patricia Kiwanuka.6. Delegates during a session. 7. Phillip Bradford and Sola Ojelade, with delegates. 5Copyright © 2013 CFA Society Nigeria, All rights reserved.