The Nigerian Stock Exchange (NSE) pulled off surprising performance in the face of global economic meltdown induced by COVID-19 pandemic to rank the best in the world’s stock markets.

A Bloomberg report said Nigerian stocks are headed for their highest annual gain in seven years riding on low yields in fixed-income markets.

Nigeria’s equities benchmark index recorded its highest return, rising 45.7% this year. The report said it’s the most among 93 equity indexes tracked by Bloomberg, and makes the NSE the best performing stock market year-to-date.

The unprecedented performance was attributed to investor’s appetite for riskier assets, which have remained strong due to persistent low yield on fixed-income instruments, Bloomberg said, citing Chapel Hill Denham’s note to clients on Tuesday. It added that it has been buoyed by traders positioning for Dangote’s share buyback program which is billed to hold this week.

Denham said the equities will continue to outperform bonds in 2021 given the current overstretched fixed-income valuations.

The report said the Lagos bourse gained 0.75% to 39,092 as of 13:47 p.m local time, to reach its highest level since June 2018.

The all-share index which opened at 38,800.01, inched higher by 310.16 points or 0.80 percent to cross the 39,000 mark and close at 39,110.17.

Also, the market capitalization rose by N167 billion to close at N20.446 trillion compared with N20.279 trillion achieved on Thursday before the Christmas and Boxing Day holidays.

Year-to-date returns are currently at 45.7 percent; the best annual return since 2013.

According to analysis by TheCable, investors had booked N7.31 trillion in gains as of December 22, 2020. The rally was also supported by the dovish stand of the Central Bank of Nigeria (CBN).

The apex bank cut the base monetary policy rate by 200 basis points to 11. 5 percent, in order to boost lending, discourage savings and drive growth to counter the pandemic effect on the economy, while also keeping rates low in the fixed income market.

Excess liquidity (created by CBN’s OMO restriction), the hunt for double-digit yields and depressed pricing, helped to rekindle local interests in the equities market in 2020.

The uptrend recorded at the end of trading on Tuesday was driven by price appreciation in medium and large capitalised stocks amongst which are; BUA Cement, Zenith Bank, Access Bank, NPF Microfinance Bank and NEM Insurance.

A breakdown of the price movement chart shows that Jaiz Bank dominated the gainers’ chart in percentage terms with 10 percent, to close at 66k per share.

NEM Insurance followed with 9.56 percent to close at N1.49, while Lasaco Assurance rose by 8.82 per cent to close at 37k per share.

NPF Microfinance Bank improved by 8.39 per cent to close at N1.68, while Japaul Gold and Ventures appreciated by 8.33 per cent to close at 52k per share.

Conversely, NCR led the laggards’ chart in percentage terms, losing 9.68 per cent to close at N1.96 per share.

FTN Cocoa Processors trailed with 8.99 per cent to close at 81k, while Trans-Nationwide Express shed 8.86 per cent to close at 72k per share.

Chams shed 8.70 per cent to close at 21k, while AXA Mansard Insurance lost 4.76 per cent to close at N1 per share.

Also, the total volume of shares traded rose by 85.4 percent with an exchange of 722.57 million shares worth N4.38 billion in 5,042 deals.

This was in contrast with a total of 381.72 million shares valued at N7.97 billion exchanged in 2,925 deals on Thursday.

Transactions in the shares of AIICO Insurance topped the activity chart with 273.13 million shares valued at N326.09 million.

Oando followed with 81.45 million shares worth N323.33 million, while FBN Holdings traded 41.09 million shares valued at N294.21 million.

Access Bank traded 40.14 million shares worth N353.27 million, while Champion Breweries transacted 36.33 million shares worth N30.16 million.

In a bid to ease investors’ concern emanating from the recent antitrust probe on Alibaba and Ants Group by the Chinese government, the company is considering a holding company with regulations similar to banks. Bloomberg made the report citing sources.

Alibaba and Ant have been at the center of antimonopoly investigations by the Chinese regulators, which has impacted their stock negatively over the past weeks.

Now Ant is planning to fold its financial operations into a holding company that could be regulated more like a bank, according to people with the knowledge of the plan.

The lead figure in Ant, Jack Ma, got into trouble with the Chinese government earlier in the year, after he criticized the regulatory bodies over what he called “pawnship mentality” and not knowing the difference between supervision and regulation.

To get out of the trouble, Ant is planning to move any unit that would require a financial license into the holding company, pending regulatory approval. The people who spoke on anonymity with Bloomberg said the plan is still under discussion and subject to change.

According to the report, the operations that Ant is looking to fold into the holding company include wealth management services, consumer lending, insurance, payments and MYbank, an online lender in which Ant is the largest shareholder. But under the financial holding company structure, Ant’s businesses would likely be subject to more capital restrictions, potentially limiting its ability to lend more and expand at the pace of the last few years.

It added that the proposals suggest Ant would still be able to operate in financial services beyond its payment business, and that will ease investors’ concern about how to interpret the central bank’s directive, asking Ant to return to its root as a payment lender.

“This means China is still trying to encourage domestic consumption, and they need platforms like Ant to help with consumer loans. The key is that consumer lending shouldn’t be over-leveraged,” said Wang Zhen, a Shanghai-based analyst with UOB-Kay Hian Holdings Ltd.

It has become clear that China is not trying to break up Ant Group, but subject it to regulation, although regulators told Ant to devise a plan to overhaul its business. Under the new model, the financial segment of Ant will have to be run in harmony with the regulatory policies of China’s finance industry, but rules on how financial holding companies could be regulated are still under deliberation.

The news of a possible solution has softened the tension surrounding Ant’s stocks and its investors are beginning to heave sigh of relief. Japanese conglomerate, SoftBank Group Corp, who has the largest share in Alibaba recorded a 4.5% rise, the most in over two weeks, while Alibaba shares rose 5.7% in Hong Kong.

While operating as a holding company will offer Ant a way out of the government’s grip, it will also diminish its revenue and stymie growth.

“Its growth would slow a lot. The valuation of the non-payment business, including wealth management and consumer lending, could be slashed by as much as 75%,” said Francis Chan, a Bloomberg Intelligence analyst in Hong Kong.

Ant’s IPO filing stated that it held $11 billion in cash and equivalents as of June. The company said in its prospectus in October that it would use its subsidiary Zhejiang Finance Credit Network Technology Co. to apply for the financial holdings license.

But as Bloomberg report notes, under the rules announced in November, non-financial companies which control at least two cross-sector financial institutions are required to hold a financial holding license.

Part of the new rule says the use of asset-backed securities to fund consumer loans capped at four times net asset value; loans using funding from banks and shareholders shouldn’t exceed firms’ net asset value, and regulators will have to cap interest rates charged on consumer loans.

Chan said Ant will need to inject an estimated 70 billion yuan ($11 billion) at least, as a new capital for its lending business. The calculation is based on draft rules that require Ant to co-fund 30% of loans, with a maximum asset leverage of five times.

He added that Ant’s valuation could plunge below $153 billion as a result of the changes it will undergo as a holding company. The company was above $300 billion in November, before its IPO was halted.

According to one person familiar with the matter, Ant is planning to leave its digital lifestyle business – the services that link users with food deliveries, on-demand neighborhood services and hotel bookings – out of the financial holding company. He added that Ant will still be the parent of all the operations.

However, the person explained that Ant is not planning to break up now, but it’s seeking more guidance from regulators on acceptable steps to take and may change every plan based on the feedback.

I first came across Suli Break’s Why I Hate School But Love Education video in 2015, and it was life changing.

Prior to then my philosophy was built around the core importance of school, and how without schooling, a person would have very little value he could create and extract from society – Simply put, my philosophy was simple – if you didn’t go to school, you’d be broke.

Suli’s video did something spectacular to me; it helped me understand the dichotomy between school and education. It helped me realize that school and education are not the same thing. Let me break this down.

Schooling and formal education started in Ancient Rome in the middle of the fourth century BC. However, the rise of the kind of education we have today was instigated by the Industrialists of the early 19th century due to a need for workers to work at their factories and plants. School was essentially a medium for shipping out factory workers en-masse.

The problem is this; we have come to align schooling and education as a single concept. This is a fallacious idea. The same way a restaurant is a platform for acquiring food; school is essentially a platform for acquiring education.

What this means is that the same way we do not necessarily have to go to a restaurant to get food (we can cook our own food), is the same way school doesn’t necessarily have to be the default platform for acquiring education.

If you’re an entrepreneur and a true capitalist – you know that when you start a business, your goal is to build a monopoly. You don’t want competition taking a bite of your pie. Monopolies are good, especially when you’re on the board of the business with the monopoly; cashing in on million dollar stock options, and making it rain like it’s no man’s business. The problem is, in most cases when a business has a 90% market share with the other 10% share allocated among 14 different rat like companies called startups, they have very little incentive to innovate, and the consumers suffer from either a low quality product, or an exorbitantly priced one.

Today, school (especially the Nigerian school system) which is now synonymous with education has morphed into a horrible monopoly that must be checked. This product now takes in 1.7 million users per year, graduates 500,000 of them, fills their heads with theories they may never implement and/or apply, and sends them into a job market that labels them unemployable.

The product (kind of education) that school sells today is an expired product that needs to be reevaluated and subsequently taken out of the market.

Twenty First Century Education

Twenty First Century education is a different ball game entirely. Some days ago, an acquaintance asked me a business question I didn’t know the answer to. I told him that knowing everything in my head wasn’t of paramount importance, in 5 minutes and one Google search; chances, I can regurgitate any information back at you like I’ve known it for years. Twenty First Century education has very little to do with cramming and memorizing concepts and theories, and more to do with your ability to take in information, process it, and reproduce it in a comprehensible form.

I’ll write that again; Twenty First Century education is less about cramming and memorizing theories, and more about your ability to take in information, process it, and reproduce it in a comprehensible form.

What we call work experience is really the ability to understand and recognize patterns.

When you buy a book on marriage just before you get married, what you’re essentially trying to do is study the pattern the author (who probably has years of marital experience) has recognized, and learn to capitalize on those patterns to have a blissful marriage.

When an entrepreneur or a CEO buys a domain specific business book by another business leader, he’s essentially doing the same thing – trying to capitalize on the patterns others have recognized.

And when a Christian reads the Bible, he is also trying to capitalize on patterns recognized from thousands of years ago.

Work Experience is essentially the ability to capitalize on recognized patterns.

Twenty First Century education is a totally different ball game entirely.

Edtech

There are two kinds of Edtech startups – those trying to augment school (Gradely, Edves, Schooberry, Netop) and those trying to disrupt it (Coursera, Udemy, edX, Utiva).

Even Google has picked up an interest in the Edtech space – announcing in August of 2020 the launch of its Google Career Certificates – a 6 months subscription learning program that ends with a Google Career Certificate that Google has announced it will be accepting in the place of a 4 years college degree. In other words, one of the quickest ways to get into Google Nigeria (probably one of the best places to work in Lagos) is through a 6 months online training program. Valuable information you shouldn’t joke with. You can thank me later.

Schools Value Proposition

Disrupting the monopoly called school is no walk in the park. Every system has those who profit of its inefficiency and ineffectiveness – these people will usually resist any change that may negatively affect them, regardless of the material good it does for the system in general. The Nigerian School system is ruled by ASUU overlords whose major concerns are their own welfare, rather than the quality of the product (education) being delivered to their users (students).

All disruption is primarily a function of a competitor’s superior execution of the incumbents value proposition.

The first step in disrupting school is finding out school’s value proposition and superiorly [sic] executing on it (doing a better job).

The schooling system has 3 key value propositions:

• Community/Experience
• Learning
• Prestige

• Community/Experience

There are many reasons people go to Church – some go to hear the Word of God, some go to admire the scenery of the building, and some go to look for fine girls.

As much as school is primarily for learning, some people’s most valuable reason to go to school is the community experience – meeting new people, getting to rub minds with interesting people, and potentially having a classmate whose dad is the commissioner of something that can help you get a job, or potentially close a deal.

Humans are communal by nature; there are certain kinds of experiences that cannot be obtained via virtual channels alone.

Platforms like Coursera and edX will usually falter in replicating this value proposition due to their primarily remote business models. Businesses like Utiva that have better on ground presence can deliver on this (and they usually do).

• Learning

The core value proposition of school is learning. When a business fails to properly perform its core purpose, it is only a matter of time before it becomes completely morbid.

School has now become a platform for cramming, memorizing and regurgitating theoretical concepts that even the regurgitator [sic] themselves have no idea what they mean or do.

The goal of school has now become the acquisition of a certificate, rather than the acquisition of knowledge and pattern’s.

Most Edtech startups are well positioned to disrupt this value proposition.

A year of consistent and focused learning on Coursera, edX, Udemy and the likes is usually a way more valuable investment than four years in a Nigerian higher institution of learning (unless you’re studying a course like medicine or law).

• Prestige

My mother gives a lot of value to a Bachelor’s degree – I do not. The system has so rubbished the concept of having a Bachelor’s degree, that people now seek advanced programs (Masters) just to be relevant in the marketplace.

Unless you’re hiring for a tech role where academic qualifications (should) have little value, and employers hire for skills rather than degrees, a Bachelor’s degree in computer science from the University of Lagos has way more value to any employer than 20 MOOC’s (Massive Open Online Course) from God knows where.

Although some people say a Bachelor degree isn’t just about what the student has learned, but his/her ability to learn, it could also mean many things; It could mean the student is good at cramming (low value workplace skill), an expert at malpractice, wealthy or beautiful enough to bribe, and a host of other things.

MOOCs have a global completion rate of less than 4% of all participants. A student with 20 or even 10 MOOCs has effectively proven that they both have a desire to learn, and the dedication to finish what they start (which are exceptional workplace skills if you ask me).

Until a certificate, or some kind of proof of learning from an Edtech startup is enough to convince employers to hire (or consider) an applicant over a basic Bachelor’s degree (the way an AWS Solutions Architect certification will draw some attention to you), Edtech startups still have a long way to go.

Create a Learning Incentive

There’s a video I came across some years back where some young boys were performing a song with lyrics like; “last last school na scam”, they gave examples of people who had ignored conventional schooling and had been able to accumulate certain things of monetary value to validate their decisions.

As long as school is less likely to help you get rich, people have less of an incentive to be serious about it.

More people are interested in learning how to trade Forex (because it pays), than those interested in learning how to plot any graph of Y against X. According to DailyFX, Nigerians trade an average of US$1.2 million a day in Forex trading alone.

The proliferation of technology globally has created a strong demand for software engineering skills. Since software engineering is primarily a skill based profession, and can be obtained with very little (or no ) traditional schooling – everyone has a seat at the table.

According to Github’s 2020 State of The Octoverse Report, Nigeria had the highest percentage increase in contributors from last year at 65.9% – 140 basis points ahead of the runner up – Hong Kong.

As long as people believe and are assured that a specific kind of education can guarantee them a job or a steady source of income – adoption rates of that kind of education will definitely increase.

The Internet Fraud Paradox

I do not in any way support internet fraud, and I have personally witnessed firsthand what internet fraud is doing to Nigeria’s global perception – but as much as internet fraud is a negative to our global perception, it is a plus to our local economy.

Internet fraudsters deceive people in foreign nations, and subsequently divert that money down to Nigeria where they spend a majority of it within the confines of our local economy.

One of Nigeria’s greatest exports is talent. The Central Bank’s new policy that allows you receive money directly in foreign currency when money is paid into your domiciliary account means that as more remittances are made to Nigeria – our currency will begin to improve (basic supply and demand stuff).

If more well trained Nigerians in the technology industry can get access to remote development opportunities from foreign businesses; remittances will increase, our local economy will see an improvement, and our currency will be bolstered. Edtech firms have the capacity to make this shift a reality.

A good number of top schools in the U.S. offer some kind of job search assistance to their students on graduation.

When formal schooling as we know it today was originated, it was more about creating opportunity than just doling out certificates. Edtech startups today may have to recalibrate and shift their focus.

If Nigerian Edtech startups of today are to stand a chance at disrupting school, they have to switch from not just selling education, but to selling opportunity.

Conclusion

School as an institution (from a Nigerian perspective) has failed to deliver on its core value proposition – this has created a loophole for innovative and forward thinking Edtech startups to capitalize on.

Edtech startups seeking to disrupt the monopoly called school must become opportunity oriented businesses whose focus is more on bettering the lives of its users (students) than just doling out certificates.

Inspired By The Holy Spirit

P.S: for consultation services, or to talk about all things strategy, you can send a message to the email below or reach out on LinkedIn (https://www.linkedin.com/in/maro-elias-184685b3/), let’s talk.

Tesla is planning to set up a plant in India as it pushes for more market share in Asia and Europe. India’s transport minister Nitin Gadkari told national daily, the Indian Express on Monday that the electric vehicle giant will arrive in the country early next year.

The move underscores Tesla’s plan to explore emerging markets and India’s determination to embrace cleaner energy. India has a 2030 target to make the country a 100% electric vehicle (EV) nation, as it seeks to reduce its dependence on oil and curtail its pollution problem. But the target has been stymied by lack of investment in manufacturing and infrastructure such as charging.

Gadkari said although the world’s most valuable automaker is setting up a plant in India, a lot of other Indian companies are also working on electrical vehicles that might be more affordable, but technically as advanced as Tesla.

According to him, Tesla will start operations with sales and then, depending on market progress, look at assembly and manufacturing. He added that “India is going to become a number 1 manufacturing hub for auto in five years.”

Apart from its push for cleaner energy, India has been fighting for a market in the tech space in Asia, where China rules. The recent border conflict between the two Asian giants appears to have triggered the quest now more than ever.

Tesla CEO Elon Musk had in October, in a tweet response to a question about Tesla’s intention to establish in India, acknowledged the company’s plans to do so “next year.” He confirmed in another tweet response on Sunday that the plan still holds, but it’s not happening in January.

Model 3, Tesla’s cheapest model will be the first to be launched. Economic Times on Sunday said the prices will start at over $74,739 (5.5 million Indian rupees), a price considered affordable for the Indian market, and sales will start in the second half of the year.

The move will offer Tesla a chance to amend the dented relationship it has had with some of its Indian customers who were among the first to make $1,000 deposits for Tesla cars back in 2016 and are yet to receive their cars. Some of the customers told Indian Express that they felt let down by the company.

The move also marks the first time that Musk is taking a shot at a plant in a developing nation, and its success may well determine if the American company will show interest in other nations, particularly in Africa. But it will be a long shot as electric vehicle infrastructure is still lacking in most developing countries.

In 2017, Musk said Tesla cars would come to India in summer. But that didn’t happen, and resulted in the delay in delivery of cars to Indian consumers who had made subscriptions. Musk blamed the situation on the government’s FDI policy which he said in a tweet, required “that 30% of parts must be locally sourced and the supply doesn’t yet exist in India to support that.”

India was grappling with infrastructural deficiencies that will enable the operation of electric vehicles then. But a lot has changed now. There are over 10 world class EV manufacturers in India, including Mahindra Electric, the pioneer of electric vehicles in the country, who built its first car as early as 2001. And there is Tata Motors, the largest automobile manufacturer in India, who is among new entrants in the electric vehicles manufacturing.

With the increased EV infrastructure in India, including rampant charging stations, Tesla will only have to worry about competition with indigenous manufacturers, whose cars are likely to be more affordable, not the FDI policy.