Comercio Partners, a limited liability company in Nigeria with core business in trading fixed income securities and equities, has expressed its readiness to secure a merchant banking license in the next two to three years.
Speaking yesterday at a press conference held in Lagos to mark the firm’s five years anniversary, Comercio Partner Co-Managing Partner/ Head, Investment, Tosin Osunkoya, said the financial institution will be seeking an operating license from industry regulators to begin merchant banking business.
He said: “So, we plan to have a regional bank or a merchant bank in the next two or three years, we also plan to retain those entities that are in existence right now. So, you have the trading arm of the business- which is commercial trading, Comercio Asset management and Comercio Partners capital.”
The company recently participated in the Lagos State bond issuance process as one of the leading indigenous firms having only operated in the last three years.
Osunkoya said the move was part of the target set by the company to drive growth and expansion despite the economic challenges facing the country.
According to him, the plan was to continue providing financial advisory and asset management services to domestic and international investors in the Sub-Saharan African Capital Markets that are interested in the newly emerging frontier market in Nigeria.
According to him, “We are looking beyond 2021. The target we set for ourselves for the next five years is for Comercio Partners Limited to be a one-stop shop. As a client, if you are looking to do any kind of financial transaction or looking for financial services, Comercio Partners should be your first thought.
Osunkoya said that in the next five years, the company plans to capture the minds of the retail investing community, institutional investors, High Net worth Individuals (HNIs) and house outlets. Our plan is to set up an organogram with different entities under a single structure.”
He said the company recently participated in the Lagos State bond issuance process that raised about N100 billion. This, he said, not only connoted their competence in the industry but conveyed a strong message to the market and further boosted their penetration in the industry, the co-founders stated at the conference.
“We are able to demonstrate this at the last Lagos state bond issuance. Lagos state raised about N100 billion and we were ranked the number two. So, you can imagine a company that is just about three years in operation competing with those that have been in the market for a number of years. Also, our participation showed we are building a brand that would last for a long time.”
Meanwhile, recounting the major successes the firm has recorded since its inception and its plan for the future, Osunkoya disclosed plans are underway to diversify its operations into investments banking operations to give its clients base more robust financial options.
“We are thinking of having the license to operate regional banking and trading; which is going to be security, asset management and you also have capital and investment banking which is investment banking or advisory services.”
“Recently, in the last 18 months, we have also been instrumental in breaking new frontiers. With Covid-19, we are able to break into other markets outside the Nigerian markets in the Euro-bond space. We got into Angola, Rwanda, Kenya and some of our clients are able to diversify their portfolio from Nigeria or the local instruments to foreign instruments,” he stated.
This, Osunkoya noted, led to some institutional investors and HNIs looking into buying instruments in other countries which was never done in the country before now.
“We have recorded a number of successes. For us, a lot of milestones were achieved in the last five years, having started with two clients but now the clients are in hundreds,” he stated.
However, as the firm continues to expand into new frontier markets, having secured its asset management license in 2017, noted that it has pioneered a platform in the fixed income markets that would liberate the sector which has been largely ignored by the investing community.
“What we are pioneering right now is to build a platform called tradefi that allows you at the comfort of your home buy and sell treasury bills and bonds. It is so convenient and fast. With this achievement, it has put us in the limelight for people to expect a lot from those products going into the future”.
The company conducts rigorous research by utilizing both macro and microanalytical tools to generate a statistical analysis of the prevailing market trends in achieving the stated goal of client asset appreciation.
Also speaking, other co-founders, Steve Osho, Head, Financial Advisory and Nnamdi Nwizu, Head Trading, stressed the need for the government to continue to create a stable policy that would allow free entry and exit for foreign investors to invest in the country.
According to them, when yield starts to rise there would be less interest in the equity market, which is riskier than the fixed income markets.
“When people see they can get better income in the fixed income markets they will reduce their appetite for the equity market. So, one thing that is key is for us to grow our reserves again because we have little participation from foreign investors,” they emphasised.
