By West Africa Capital Market School

After having reflected on the fact that there is now little doubt that the Nigeria Stock Market is in the midst of a bear run and that the bear would dominate the market over a long period, experts at the West African School of Capital Market, have offered to avail capital market operator the appropriate trading strategies for the bearish market.

“Economic fundamentals do not support a swift return to an upward price trend,” the experts noted in a dispatch to operators and investors. “With oil hovering in the low $40s, there is precious little money flowing from the public sector unless of course there are draw downs from dedicated accounts to fund some sort of large scale infra-structural investment and even this will take some time to trickle through based on emergent large bets against the local currency.”

The experts highlighted eight broad approaches to managing clients’ portfolio for stockbrokers.

1. Avoid investment diversification. Diversification is a great idea in good markets as it cuts down market and sector risk. However, in a bear market, the problem is with the broad market. The broader your selling of low performers, and concentrating your investments in fewer stocks that have shown the best performance, is the way to go. Your risk is no longer corporate performance but low confidence in the overall market and so it does not make sense to be broadly represented.

2. Help clients identify and preserve core capital – you will have to trace client investments by contribution/performance to identify core capital. Let clients know that you are focused on ensuring that they remain “in the game” and are positioned for a market rebound when it eventually comes.

3. Review your website and its contents to reflect the new realities and change research recommendations from “buy’ “sell” “hold” to a “preserve”, “growth” and “aspire” type recommendations. Preserve stocks will provide growth and income necessary to preserve core capital and maintain lifestyles. Growth will beat the overall index and Aspire is for long term gains when the market picks up. Conservative clients may choose to start out with 50 per cent Preserve, 40 per cent Growth and 10 per cent Aspire and then mechanistically adjust the portfolio later.

4. Shift emphasis from selling stocks to financial planning and wealth management if you have the skills for these. Financial planning is far more defensive than wealth management which requires the identification of non-financial wealth and the setting up of the right trust structures.

5. Be wary of new investment types that you don’t fully understand. The property market, for instance, will in all probability self correct especially at the high end where oversupply and tighter bank credit is now becoming an issue. If you are just getting into property come in at the middle and low end. Avoid the Lekki-Epe axis by all means.

6. If you choose to bet against the naira, do so in an intelligent way and realize that dollar rates can crash if government so desires. You need to get an inside track on just what government thinking is. A strong dollar will cut imports in the medium term and do long term good to the reserves but this strategy might go horribly wrong. We have to wait and see.

7. Keep your people engaged as much as you can. The obvious reaction is to slash and cut and sometimes this may be necessary but rather stay positive and prepare for the bull market because it will come back and for a fairly sustained period too. This means lighter more qualified and educated personnel and wise investments in scalable technology. If you are going to sell optimism abroad then sell it at home too and stay on message.

8. How do you know when the market is recovering? You will need to get some of your people busy on creating and maintaining the A/D Line of the NSE All share. Each day deduct the number of stocks gaining from stock shedding value and graph the resultant values. This will show clearly when the broad market begins to recover.

Technically, the market is in base formation right now with small gains being matched by exits/loss capping. Traditionally, base formation is followed by a sharp and sustained movement to the up or downside. You can estimate this by looking carefully at the volume on up days and the volume on down days. The whole idea is to cancel out the noise being generated by the overall index to see where recovery is likely to begin from.

The other option to these suggestions is to do nothing and hope for the best. While hope might be a laudable trait it is certainly not an advised business strategy. We believe that the market is transiting from high volatility/high gain frontier market status to a more sustained emerging market growth type of market. Such transitions are always painful but unavoidable,” the experts submitted.


Government is no doubt the biggest business in Nigeria, so it is in countries around the world. Exception is that in more economically developed lands, especially those that are inclined to the capitalist economic model, rather than government to directly engage in the economic arena, they provide an environment where individuals play the economy in pursuit of personal benefit for the good of society in accord with the policies and philosophy of government.

The Nigerian situation won’t pass the test of a capitalist model, what with the confusion that defines government roles in the productive and service sectors that had left public utilities in vicious spasm of a slow death.

The failure of the Nigerian government in business and provision of society’s essentials like potable water and electricity power is no longer controvertible, Nigerians have generally given up on their expectations from government in this regard, it is, however, troubling that government and its agencies now garb economic policy positions and thrusts with odious subterfuge and double speak.

Moments after, the economies of the United States of America and the United Kingdom went into a tailspin, even the most economically ignorant was able to conjecture that the global economy was on its way to a storm which consequences may surpass the storied damnation of the Great Depression that commenced in 1929. But officials of Nigerian government would rather see no evil, hear no evil. The two finance ministers and the Governor of the Central Bank of Nigeria assured that the country was immune to the vagaries of the devastation that had begun to shake the economic foundations of the United States, United Kingdom, Europe and Asia.

Yet, signs of malevolent economic change were becoming obvious. Price of crude oil, the nation’s mainstay natural resource suddenly took a dive southward from high in the $150 per barrel of crude oil to $44. Reason for this is obvious, one needs not be a Keynesian to rationalize that developed economies that are the major consumers of crude oil disciplined their appetite for crude oil which in turn reduced the pressure on the demand with attendant fall in price. For Nigeria the implication is grievous, reduced revenue collection, cut down in GDP growth projection, a cascading fall in value of the naira, the national currency, the direct deployment of the $58.11 billion foreign reserve as intervention to save an imperiled economy. And eventually, a life of further distress for the average Nigerian. You don’t need to be a professor of economics to anticipate this turn in the economic sphere.

Already, the scenarios are playing out, the national budget for 2009 is a deficit budget due to anticipated reduction in revenue, three weeks ago, the Naira took a hiding from speculators and others when it lost more than ten per cent of its value to the Dollar in three days; just as there are discomfiting indications of distresses in financial institutions.

The CBN, after its Monetary Policy Committee meeting announced it was going to intervene directly in the daily two way quote foreign exchange market with fund from the nation’s foreign reserve.

Apparently, government and its agencies lack economic anticipatory skill. Soon after the first sign of trouble in the west emerged, a more focused government and its agencies would have cobbled a fiscal and monetary policy position targeted at the eventual impact of the roiling global economic scene on the country.

It is not too late, rather than the piece meal attention to specific worrisome spectre of economic emergency, it is better for the CBN, finance ministry and whoever, to evolve policies and measures with strong anticipatory ingredient to address likely troublesome financial and economic scenarios that may impact the country in the next 12 months.

As it is, we lost the opportunity to seize the initiative of building a bulwark against the negative consequences of the global economic downturn by acting the ostrich with its head in the sand even as trouble raged.

Certainly, responsible and responsive countries around the world are girding their loins in anticipation of a long tenor of battling with the economic crises. For Nigeria, the consequences of the global economic troubles are yet to fully manifest in the country, it would, indeed, be a matter of common sense to put together measures and policies that can help stave the negatives of the eventual infiltration of the global economic crises. This is a better option than to continue to beat the chest in the assurance of the community enjoying certain immunity from the global crises.

We all know that Nigeria is not exactly blessed with enduring economic structures and initiatives that have the capabilities to self correct in the face of a crisis that slowly but inevitably heads toward the country.


I had thought of reviewing some other medication issues this week but the My Pikin Mixture tragedy kept crying’ for more attention. During this past week, accusations, counter-accusations and new revelations by different agencies and parastatals of the Federal Ministry of Health made this issue to remain on the front burner of the healthcare sector. Interestingly, some callers, in response to my last week write-up were a little bit upset, they accused me of being economical with my conclusion and position rather than asking so many questions, questions that are yet to be addressed by those concerned even as at today. These I hope to clarify in this edition by critically looking at issues that came up during the past week.

How big is this problem?

As I have already maintained, this is a national tragedy and disaster that requires an emergency response. In a country where most patients do not have access to modern healthcare, the level of reported health issues to the authorities is better imagined. This is why some of us believe that the 55 reported cases in the My Pikin mixture tragedy is just an understatement. Unfortunately, the symptoms of diethylene glycol poison are similar to what people consider as ‘spiritual attack’ in our local environment. This may have been the conclusion of some of these innocent parents by discharging their children against medical advise as reported during the week.

The statement by the Lagos University Teaching Hospital (LUTH’s) Chief Medical Director (CMD), Prof Akin Osibogun that My Pikin Mixture may not be the only cause of the infant deaths should not be taken lightly. According to the investigations of the LUTH’s team, 43 percent of the deaths admitting using My Pikin Mixture were related to the use of the drug. This, logically, suggests that something else may be responsible for the cases of the other 53 percent deaths that manifested the same symptoms as those that took My Piken Mixture. My guess is that other brands of teething mixtures are out there in the markets that may be equally Harmful.

Furthermore, according to investigations so far conducted by NAFDAC in 33 states, 2,057 bottles of My Pikin Mixture were recovered. “Out of the total, 255 bottles of batch 02008 (the contaminated batch) were recovered. A total number of My Pikin retrieved from across the country is 425 bottles; 297 from Rivers State, 81 from Kaduna State and 47 from Lagos.”

If the batch size of My Pikin was 3000 products and NAFDAC was only able to retrieve 255 bottles, we still have over 2,400 poisonous My Pikin Mixture either in circulation or already consumed. Unfortunately, drug distribution system in the country is chaotic and unstructured. This is where I will want to agree with the President of the Pharmaceutical Society of Nigeria, Mr. Anthony Akhimen fired from all cylinders during the week. Mr. Akhimen berated the government over the chaotic drug distribution system that does not permit an audit trail procedure for recalling spurious products.

“Unless government’s attitude is changed and the open drug markets spread across the nation are dismantled immediately, the nation would experience a repeat of the present death saga which may be worse than what we have ever experienced,” he said.

Let me deviate a little bit to respond to specifics issues by our healthcare agencies;

From Lagos University Teaching Hospital, LUTH

According to Chief Medical Director (CMD) of the Lagos University Teaching Hospital (LUTH’s) Prof Akin Osiboguno “We are working with a team of epidemiologists from the FMOH and Lagos State Ministry of Health (LSMH). We do not have any problem with NAFDAC, but they did not share information with us. After coming here and got that 43 per cent of the children were taking My Pikin and with their own findings, they went to press without informing the Minister of Health or us. They are supposed to share information with us. We gave them some samples to go and test. But one thing that must be made clear is that all the federal agencies are working together.’

From Nigerian Association of Industrial Pharmacists (NAIP)

In the words of the National Chairman of Nigerian Association of Industrial Pharmacists (NAIP), Emmanuel Ekunno, the handling of the episode by everyone, including the NAFDAC, “has been unnecessarily sensational rather than being scientific.’

National Agency For Food And Drug Admin. and Control, NAFDAC

“The reporting system, whereby LUTH wrote to the Minister of Health when this situation broke out is not the best for our system when we even have pharmacovigilance centre in such hospitals. LUTH is supposed to report straight to us when the problem started, so that we will be swift in addressing it to forestall more deaths.

“Unfortunately, they wrote to the Ministry of Health. Government carved out NAFDAC from the Ministry of Health’s Drug and Food Directorate in 1993 to eliminate such administrative bottlenecks so that the agency can act swiftly and more efficiently on food and drug issues and report activities to the Minister, who can advise.

When one reads between the lines, it appears some agencies are just ready to justify their innocence in the national tradegy. LUTH in my opinion did what was right and followed procedures by laying a report to the Ministry which unfortunately did not escalate the necessary actions and processes. One good thing we can take out of this is that eveybody has realised the importance of collectively moving forward.

“Where did the ethylene glycol come from?

This was the big question asked by the Director General of NAFDAC. According to her “It is not possible to plant people in any factory. What we do is that before registration, we test and retest. After registration, we go to the factory in Nigeria and abroad in such cases on independent unannounced audits of factories.”

“We have not given any company permit to import diethylene glycol. The chemical used in My Pikin must have been smuggled. We are investigating the case and will get to the root of this matter”.

“Right now, we are testing other brands of paracetamol syrup from all over the country to ensure that none is contaminated with diethyleneglycol. NAFDAC staff have also moved to the local governments and villages for the mopping up process of My Pikin teething mixture.

“We have also put in our standard operating procedures that any diethyleneglycol for production of paracetamol and similar drugs must be screened by NAFDAC before use in production, no matter how sophisticated the company’s quality assurance system may be”.

One must commend NAFDAC for the swift way they moved into the appropriate segment to desiminate information to parents. My little boy came home with a newlsetter from his school with a well crafted alert from NAFDAC on this issue. This is highly commendable. However, it appears to be another grandstanding that the agency is known for when it talks of controlling the use of diethylene glycol. The fact that diethelne glycol is not a food or pharmaceutical excipient puts it outside the regulatory scope of NAFDAC. I wonder how they intend to do this.

What should we do?

1. We should Improve on the regulation of the sales of Pharmaceutical raw materials, both active and excipients

2. Restrict licencing for sale of chemicals to two broad groups; Food and Drugs and Industrial so that people do not play simultaneously in the two lines of Business.

  1. NAFDAC should have a structured programme to survey ALL products post-registration on an annual basis.

4. NAFDAC should immediately randomely assay all Paracetamol preparation in Nigeria.

  1. Compel all registered manufacturers of pcm syrup to submit their holding stock for assay,

  1. All pharmaceuticals companies should immediately subject the ‘propylene glycol ‘in their possession to the appropriate test and notify NAFDAC with the quantity, date and place of purchase.

Most of us have now been vindicated that the insistence on Nafdac no, and the hologram do not prevent or deter drug adultration. These are just media and pubicity grand standing which in the long run will not benefit the common man.

While commending the effort so far made by nafdac, one thing should be made clear. And that is that no body is contesting with NAFDAC for visibility. The agency should learn to work with other agencies, parastatals of government and other stakeholders.

In all, one fact is obvious; the product and the factory of Barewa Pharmaceuticals, the company that manufactured My Pikin were certified by NAFDAC. Since the last audit was in August, it is possible that the contaminated product was manufactured around the time of the last audit. It is certain that once a product has been approved by NAFDAC, there is absolutely no reason for any pharmacy or teaching hospital to analyse it before purchase. This last saga, to my mind is a very big indictment of NAFDAC’s product licensing capacity. Millions of people have now lost confidence in the reliabilty of NAfDAC No. on any product.



For the patient, the options available are;

1. Use Paracetamol Suspension.

2. For older children (between 3-6years) one may use the tablets, sometimes broken into two depending on the age

3. Where available, use children’s paracetamol tablets

4. Stop the use of any teething formulation or paracetamol syrup until the situation is clearer.

5. Report any case of difficulties in urinating, fever etc to your nearest pharmacy or hospital