The Nation Newspaper

Category: Equities

  • Experts call for innovative products to finance economic growth

    Capital market experts have called on stakeholders to make concerted efforts to create innovative products that could simultaneously serve as investment vehicles for the nation’s growing pension assets and financing for the huge infrastructure gap.

    Experts, who spoke at the 2018 Exchange Traded Products (ETP) conference organised by the Nigerian Stock Exchange in Lagos, said pension funds could help to stimulate long-term development.

    Managing Director, Meristem Wealth Management Limited, Sulaiman Adedokun, said the pension assets represent immense opportunity for national economic development if channeled properly through the capital market.

    According to him, government needs to ensure that there is a framework for Pension Fund Administrators to invest into long-term projects.

    “With the size of the pension fund, we should not have issues with infrastructure funding in the country. Pension fund, if paid attention to, will be a catalyst for enhancing economic performance generally,” Adedokun said.

    He called for enabling environment and improved investor education to increase the investment of pension fund in the market.

    He noted that every investor was seeking to achieve better investment returns pointing out that if the pension funds were invested in a short-term product, they would not achieve investors’ goals.

    He stated that the government ought to expand the platforms through which pension fund could be invested in the market.

    Managing Director, Crusader Sterling Pension, Niyi Falade, noted that the participation of PFAs in the market was still quite low.

    Head, Investment Management, Cardinal Stone, Tosin Ojo, stated that there was a need to create more products in the market as pension fund assets to accommodate the large growth rate of pension assets.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, noted that ETPs were one of the most significant financial innovations in recent decades that have shaped the financial markets.

    According to him, since the introduction of ETPs in 1993, they have gained widespread acceptance in most developed markets. Over the last 15 years, investors’ demand for ETPs -both retail and institutional has grown remarkably, which in turn has led to a greater variety of products offered by ETP sponsors.

    He noted that the cross-listing of ABSA’s Newgold ETF on the NSE in December 2011 opened up the ETPs market and it has since then, grown steadily by a cumulative average growth rate of 8.0 per cent over the last four years.

    Currently, there are nine ETPs listed on the Exchange – two thematic ETFs providing access to Pension-compliant and Shariah-compliant stocks, two broad equity market ETFs tracking the NSE 30 Index, three sector based ETFs, one commodity ETF, and one bond ETF tracking exposure to benchmark FGN Sovereign Bonds.

    “The introduction of ETPs is one of the Exchange’s strategies to enhance diversification as well as broaden the options available in the capital market to support the efficient implementation of investment strategies across diverse asset classes and instruments,” Onyema said.

    He urged ETP product issuers and intermediaries to expand their footprint by broadening distribution channels, introducing other asset classes and strategies, entering new markets, leveraging technology and data analytics to understand the market and demand.

     

  • Equities sustain recovery with N53b gain

    Nigerian equities traded on the positive side for the second consecutive trading session as bargain-hunting in large-cap stocks yesterday lifted the market to net capital gain of N53 billion.

    With 19 gainers to 18 losers, the overall market situation was almost on a tit-for-tat but gains recorded by large-cap stocks such as Dangote Cement and Stanbic IBTC Holdings moderated the market position.

    Benchmark indices at the Nigerian Stock Exchange (NSE) showed average gain of 0.47 per cent, representing net capital gain of N53 billion. The negative average year-to-date return improved correspondingly to -18.54 per cent.

    The All Share Index (ASI)- the value-based common index that tracks share prices of all quoted companies, rose from its opening index of 31,007.25 points to close at 31,151.68 points. Aggregate market value of all quoted equities improved from its opening value of N11.320 trillion to close at N11.373 trillion.

    However, most sectoral indices were negative, underlining the delicate balancing between bargain-hunting and selloff. The NSE Industrial Goods Index rode on the back of gain by Dangote Cement to appreciate by 0.8 per cent while the NSE Insurance Index followed with a gain of 0.6 per cent. On the other hand, the NSE Banking Index declined by 1.0 per cent. The NSE Oil & Gas Index depreciated by 0.6 per cent while the NSE Consumer Goods Index dipped by 0.18 per cent.

    Analysts at Afrinvest Securities noted that the weakening investors’ sentiment yesterday showed that buying momentum was tapering, thus there could be negative performance in subsequent trading sessions.

    Total turnover stood at 198.64 million shares valued at N2.31 billion in 2,845 deals. FBN Holdings was the most active stock with a turnover of 90.36 million shares valued at N689.82 million. Access Bank followed with 17.95 million shares worth N134.56 million while Diamond Bank placed third with 15.09 million shares valued at N12.82 million.

    Dangote Cement led the gainers with a gain of N5 to close at N190. Stanbic IBTC Holdings followed with a gain of 95 kobo to close at N47.50 while Flour Mills of Nigeria added 85 kobo to close at N21 per share.

    On the negative side, Seplat Petroleum Development Company led the losers with a drop of N15.10 to close at N598.90. Cement Company of Northern Nigeria followed with a loss of N1.75 to close at N16.25 while International Breweries declined by N1.30 to close at N29.45 per share.

  • Lafarge Africa to sell N89.21b rights issue at N12 per share

    The board of Lafarge Africa Plc yesterday announced that the company will be raising N89.21 billion in new equity funds through a rights issue at N12 per share.

    Lafarge Africa’s share price dropped by 4.48 per cent or 60 kobo to N12.80 per share yesterday at the Nigerian Stock Exchange (NSE).

    The rights price represents a discount of 10.45 per cent on the company’s traded closing price as at Monday, December 3, 2018.

    The rights issue will be pre-allotted on the basis of six new ordinary shares of 50 kobo each for every seven ordinary shares of 50 kobo held as at the qualification date. The decisions were reached at the emergency board meeting held on Monday.

    According to the company, the regulatory approval process is ongoing.

    The latest capital raising is Lafarge Africa’s second issue in 14 months. Lafarge Africa had sold its November 2017’s rights issue of about 3.1 billion ordinary shares of 50 kobo each at N42.50 per share.

    The new rights issue will also be structured like the November 2017 rights issue, including a convertible deal that allows the majority core investor- LafargeHolcim, to convert its debts to equities.

    At a recent extraordinary general meeting in Lagos, shareholders had approved resolutions authorising the company to create additional 10 billion ordinary shares of 50 kobo each to increase its authorised share capital to 20 billion ordinary shares.

    Shareholders also authorised the board of the company to raise capital of N90 billion by way of a rights issue of ordinary shares to its shareholders  and that the rights issue be executed at such price, time, for such period and on such other terms and conditions as the directors may deem fit.

    Also, the meeting granted the board the authority to apply any convertible loan, shareholder loan or any other loan facility due to any person, from the company, as may be agreed by the person and the company, towards payment for any shares or rights subscribed for in the rights issue.

    Shareholders also authorised the company to enter into a related party transaction to accept loan facility from LafargeHolcim, the foreign majority core investor which holds 76.32 per cent equity stake.

    Chairman, Lafarge Africa Plc, Mr Mobolaji Balogun, said the additional capital to be raised will further help to deleverage the company’s balance sheet and provide head room for the expansion of its business.

    He said the company foresees a stable pricing environment and favourable economic conditions in its Nigeria market while its South Africa operations are undergoing a turnaround plan.

    Chief Executive Officer, Lafarge Africa Plc, Mr. Michel Puchercos said the company’s refinancing plan is aimed at preparing for future development in Nigeria by improving the company’s leverage as well as strengthening its profitability.

     

     

  • Lafarge Africa calls emergency meeting on rights issue

    The board of Lafarge Africa Plc yesterday cancelled a previously scheduled interactive session at the Nigerian Stock Exchange (NSE) and entered an emergency meeting amid worry that the slump in the company’s share price could undermine its forthcoming rights issue.

    Company Secretary, Lafarge Africa Plc, Adewunmi Alode, who confirmed the emergency board meeting in a regulatory filing, stated that the meeting was called to “consider the rights issue price”.

    In order to forestall insider dealings, the company cautioned that no director, employee, persons discharging managerial responsibility and advisers of the company and their connected persons may directly or indirectly deal in the shares of the company until information regarding the rights issue price is released on the NSE.

    At a low of N13.40 per share and year-to-date decline of 70 per cent, Lafarge Africa is the worst-performing stock at the NSE so far this year.

    Lafarge Africa plans to float a N90 billion rights issue this month, its second rights issue in 14 months. Shareholders had approved the plan by the company to raise about N90 billion in new equity funds as it seeks to deleverage its balance sheet and restructure short-term loans.

    At a recent extraordinary general meeting in Lagos, shareholders approved resolutions authorising the company to create additional 10 billion ordinary shares of 50 kobo each to increase its authorised share capital to 20 billion ordinary shares.

    Shareholders also authorised the board of the company to raise capital of N90 billion by way of a rights issue of ordinary shares to its shareholders  and that the rights issue be executed at such price, time, for such period and on such other terms and conditions as the directors may deem fit.

    Also, the meeting granted the board the authority to apply any convertible loan, shareholder loan or any other loan facility due to any person, from the company, as may be agreed by the person and the company, towards payment for any shares or rights subscribed for in the rights issue.

    Shareholders also authorised the company to enter into a related party transaction to accept loan facility from LafargeHolcim, the foreign majority core investor which holds 76.32 per cent equity stake.

    Chairman, Lafarge Africa Plc, Mr Mobolaji Balogun, said the additional capital to be raised will further help to deleverage the company’s balance sheet and provide head room for the expansion of its business.

    He said the company foresees a stable pricing environment and favourable economic conditions in its Nigeria market while its South Africa operations are undergoing a turnaround plan.

    Chief Executive Officer, Lafarge Africa Plc, Mr. Michel Puchercos said the company’s refinancing plan is aimed at preparing for future development in Nigeria by improving the company’s leverage as well as strengthening its profitability.

    Lafarge Africa had sold its November 2017’s rights issue of about 3.1 billion ordinary shares of 50 kobo each at N42.50 per share.

    Key extracts of the interim report and accounts of Lafarge Africa for the nine-month period ended September 30, 2018 showed that sales rose from N223.67 billion in third quarter 2017 to N234.30 billion in third quarter 2018. With cost of sales rising from N165.76 billion to N178.21 billion, the cement company however ended with a pre-tax loss of N14.36 billion in 2018 as against pre-tax profit of N1.09 billion in comparable period of 2017. After tax gain of N4.04 billion, net loss after tax stood at N10.37 billion in third quarter 2018 compared with net profit after tax of N937.91 million in comparable period of 2017. With these, loss per share for the nine-month period stood at N1.20 in 2018 as against positive earnings per share of 10 kobo in corresponding period of 2017.

  • CBN okays Diamond Bank as a national bank

    The Central Bank of Nigeria (CBN) has approved the change in the licence of Diamond Bank Plc from an international bank to a national bank with immediate effect. The approval is, however, subject to the conclusion of the sale of Diamond Bank United Kingdom.

    The move follows Diamond Bank’s decision to sell its international operations, which included the disposal of its West African Subsidiary in 2017 and Diamond Bank UK, the sale of which is in its final stages. With this approval, the bank will cease to operate as an international bank.

    Diamond Bank at the weekend indicated that the re-licensing as a national bank supports its objective of streamlining its operations to focus resources on the significant opportunities in the Nigerian retail banking market, and economy as a whole.

    According to the bank, the change to national bank status also enables the bank to maintain a lower minimum capital requirement of 10 per cent as against 15 per cent required for international banks. This creates room for the bank to deploy more capital for stronger growth in the quarters ahead through additional investment in technology platforms, customer acquisition and expansion of loans to the critical sectors of the economy.

    The bank’s Chief Executive Officer, Mr. Uzoma Dozie said the move to a national banking license marks a continuation of the bank’s strategy to focus on Nigeria’s significant fundamental trends, including a large underbanked population and Africa’s biggest economy.

    According to him, by focusing and optimising its resources towards Nigeria and the priority area of retail banking, the bank will be better positioned for longer term growth and greater profitability.

    “The reduction in minimum capital requirement also increases our capacity to expand the quantum of business and product services we can offer consumers, as well as representing a key step in strengthening our financial position,” Dozie said.

    He noted that this development, however, does not affect the bank’s ability to offer services to its clients in international locations.

    According to the bank, with focus on its domestic business being priority, the bank also intends to pay down in full, the Eurobond loan of $200 million at maturity in May 2019. There will be no refinancing of the loan as the intent to pay down with foreign exchange generated from its internal operations, a reflection of the solidity of its operations and funds flow in the last few years

    The bank pointed out that top quality services to international customers will continue through its digital channels and network of correspondence banks.

    Meanwhile, Diamond Bank has formally introduced its premium lifestyle subscription service, XclusivePlus, for its affluent banking customers.

    Speaking on the product, Head, Consumer Banking, Diamond Bank Plc, Kari Tukur, said the bank has seen a rise in customer spend in the past few years for luxury travel, luxury experiences and luxury products among the emerging affluent client segment.

    She said the new product is well positioned to further enhance customers’ lifestyles and provide them with the most satisfying rewards.

    According to her, XclusivePlus membership comes with an automatic card upgrade to the Diamond Visa signature naira debit card.

    “Diamond Bank is the first bank in Nigeria to go to market with this card. This is a naira card with higher spend limits and enabled for international spend. With this card, our customer will enjoy lots of world class travel and lifestyle benefits such as free access to over 800 Premium airport lounges globally, great discounts and VIP treatment at luxury hotels around the world, free travel insurance cover for them and their family for medical emergencies, lost luggage, flight cancellation and much more anytime they travel. This insurance is also valid for foreign visa applications,” Tukur said.

    She added that there are also benefits closer to home, including free cinema tickets all year around for the movie lovers, free premium events tickets such as concerts, comedy shows and art exhibitions and lots of great offers and discounts from a wide range of merchants across the country ranging from restaurants, bars, hotels, shopping and much more

    XclusivePlus subscribers are also invited to various seminars, conferences and round table discussions covering a wide range of topics such as wealth management & investment, economic outlook, financial planning, assess to finance and lots more. These events will give them the opportunity to acquire knowledge from industry experts and network with like minds.

    “With the XclusivePlus, Diamond Bank is always available to the customer wherever and whenever you need us through the mobile app. With over three million users, the mobile app is loaded with exciting features such as local and foreign currency transfers, bill payments, airtime top-up, esusu, events and movie tickets purchase,” Tukur said.

  • ASEA elects new executives

    The African Securities Exchanges Association (ASEA) has elected Mr. Karim Hajji, Chief Executive Officer of the Casablanca Stock Exchange, as its new president.

    Hajji took over from Mr. Oscar Onyema, Chief Executive Officer of Nigerian Stock Exchange (NSE), who had completed two terms of two years.

    ASEA is the association of 28 securities exchanges in Africa with the aim of developing member exchanges and providing a platform for networking. ASEA was established in 1993.

    Other officers constituting the newly formed ASEA executive committee include, Mr. Geoffrey Odundo, CEO of Nairobi Securities Exchange, Ms. Nicky Newton, CEO of Johannesburg Stock Exchange, Mr. Mohammed Farid Saleh, CEO of the Egyptian Exchange, Mr. Thapelo Tsheole, CEO of Botswana Stock Exchange and Mr. Pierre Ekoule, CEO Douala Stock Exchange, Mr. Koffi Yamoah, CEO of the Ghana Stock Exchange and Mr. Pierre Celestin Rwabukumba CEO of the Rwanda Stock Exchange.

    Hajji promised to work with each member of the executive committee to continuously advancing the vision of ASEA while delivering value to the membership.

    He praised Onyema for the good work done in the past four years, assuring that the new executive committee will build on the legacy he has left behind.

    “I believe that through advocacy and strategic lobbying, ASEA will be able to unlock opportunities for the much-needed liquidity in the African financial markets,” Hajji said.

    The new Deputy President, Dr. Edoh Kossi Amenounve, said he would work with the current and new members of the executive committee of ASEA by supporting Hajji in his assignment as President of ASEA.

    Onyema thanked the executives of the association for the support accorded to him during his four years in office.

    “The successes that the association has enjoyed during my tenure as President would not have been possible without the relentless support of the executive committee members and that of the ASEA Secretariat. Thank you for supporting my vision for the Association.” Onyema said.

    The official opening of the 22nd Annual ASEA Conference kicked off on November 26 at the Oriental Hotel, in Lagos.

    The conference themed Champions on the Rise; Africas Ascension to a More Sustainable Future” underpins the need for operators of African capital markets to fully embrace sustainable business practices, as well as the opportunities and risks presented by the fourth industrial revolution.

  • Continental Reinsurance rallies amid acquisition bid

    Continental Reinsurance’s share price rose by 33.33 per cent last week to N2 per share after a major investor launched a bid to acquire all outstanding and issued shares of the Nigerian company.

    CRe African Investments Limited, a majority core investor in the reinsurance company, has submitted an offer from to acquire all the outstanding and issued shares of Continental Reinsurance.

    In a regulatory filing at the Nigerian Stock Exchange (NSE), the board of Continental Reinsurance confirmed the acquisition bid, noting that the bid has received preliminary regulatory approval.

    The acquisition is expected to be executed through a Scheme of Arrangement, under Section 539 of the Companies & Allied Matters Act Cap C20 Laws of the Federation of Nigeria 2004 and other applicable rules and regulations.

    CRe African Investments is offering N2.04 per share for the 10.37 billion ordinary shares of 50 kobo each or one ordinary shares of $1 each in the capital of CRe African Investments for every 176 ordinary shares of 50 kobo each held in Continental Reinsurance.

    The proposed price of N2.04 represents a 46.76 per cent premium to the last traded share price of the company on October 5, 2018, being the last business day prior to the date the proposal was received from CRe African Investments and a 36.0 per cent premium on the trading price as at close of business on November 19, 2018.

    CRe African Investments was said to be making the offer to initiate a much-needed restructuring exercise for Continental Reinsurance, with a view to consolidating the reinsurance company’s Nigerian operations and repositioning it for enhanced competitiveness in the global insurance market.

    Already, the company has received preliminary approval of “No Objection” from the Securities & Exchange Commission (SEC). The scheme is however subject to the approval of the shareholders at a court-ordered meeting scheduled for December 20, 2018 in Lagos as well as the sanction of the Federal High Court.

    “Further details will be communicated to the market upon relevant approvals from shareholders and regulators. Shareholders are advised to exercise caution when dealing in Continental Reinsurance’s shares until a further announcement is made,” the company stated.

    Continental Reinsurance was incorporated in 1985 and started business as a private reinsurance company in Nigeria. In January 1987, it began to operate as a general reinsurer and then became a composite reinsurer in January 1990, offering both treaty and facultative life and non-life reinsurance, with a well-diversified business mix and customer base.

    As part of its goal to become a recognised leading reinsurance company in Africa, it converted to a public limited liability company in 2000. After it recapitalised to the tune of N10 billion in 2007, it listed its shares on the NSE in May 2007.

    With five client service centres in Nigeria, Cameroon, Cote d’Ivoire, Kenya and Tunisia with Nigeria as headquarters, it has grown a diversified portfolio across 43 countries.

  • Investors slow down on equities

    The momentum of activities at the equities market slowed down considerably last week as turnover volume and value dropped by 6.47 per cent and 38.31 per cent respectively. Investors lost N294 billion in sustained price depreciation that dominated the week.

    A total turnover of 1.199 billion shares worth N14.277 billion in 15,841 deals were traded last week at the Nigerian Stock Exchange (NSE) as against a total of 1.282 billion shares valued at N23.142 billion traded in 11,467 deals two weeks ago.

    Sectoral analysis showed that the financial services sector led the activity chart with 963.315 million shares valued at N7.536 billion traded in 8,871 deals; representing 80.38 per cent and 52.79 per cent of the total equity turnover volume and value.

    The consumer goods sector placed second on the activities chart with 83.001 million shares worth N4.213 billion in 2,802 deals while the industrial goods sector ranked third with a turnover of 60.782 million shares worth N1.976 billion in 1,639 deals.

    The three most active stocks were Diamond Bank Plc, Access Bank Plc, and Universal Insurance Plc, which altogether accounted for 512.535 million shares worth N1.367 billion in 1,437 deals, representing 42.76 per cent and 9.57 per cent of the total equity turnover volume and value.

    In the sovereign debt market, a total of 16,686 units of Federal Government Bonds valued at N16.442 million were traded in 10 deals compared with a total of 3,032 units valued at N3.046 million traded in 16 deals penultimate week. There was no trade recorded for Exchange Traded Products (ETPs) during the week.

    The benchmark index at the Exchange, the All Share Index (ASI) declined by 2.54 per cent to close the week at 30,874.17 points as against its week’s opening index of 31,678.70 points. Aggregate market value of all quoted equities also dropped to N11.271 trillion compared with its opening index of N11.565 trillion.

    There were 41 losers against 25 gainers during the week. Continental Reinsurance recorded the highest gain of 33.3 per cent to close at N2 per share. Diamond Bank recorded the highest price depreciation of 31.58 per cent to close at 65 kobo per share.

    “Following four days of losses in the week, we expect to see some bargain hunting in early trades next week.

  • Global Exchanges, African Exchanges partner on development

    The World Federation of Exchanges (WFE-the global industry group for Exchanges and central counterparties (CCPs) and the African Securities Exchange Association (ASEA) have signed a memorandum of understanding (MoU) aimed at supporting the development of the wider African capital market.

    The MoU, signed at the ASEA’s annual general meeting and conference in Lagos, commits the partners to support the development of market infrastructures in Africa and, through them, the development of the wider African capital market ecosystem.

    The MoU also aimed at enabling African market infrastructures to develop best practices based on global standards, while remaining appropriate to the needs of the region and nation in which they operate.

    The WFE and ASEA reiterated their commitment to collaborate in developing and implementing programmes and projects, including finding ways to increase the amount of data published by the region.

    Chief Executive Officer, World Federation of Exchanges (WFE), Nandini Sukumar,  noted that WFE’s market development mandate has always been a key pillar of the federation, noting that the agreement with ASEA crystallises the group’s vision to support members in specific regions with targeted activity.

    “We believe that exchanges in Africa will benefit from this focused approach, be it through our technical expertise, capacity building programme, or broader market development assistance to help them meet international standards and best practice. We look forward to engaging more deeply on the topics that matter to African market infrastructures, and further growing our knowledge and relationships in this vibrant continent,” Sukumar said.

    Chief Executive Officer, Bourse de Casablanca and President of ASEA, Karim Hajji, assured that the Association would thoroughly implement the agreed activities of its partnership with the WFE, and translating them into tangible results for the benefit of the two institutions.

    Former President of ASEA and Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema said ASEA and the WFE would work in tandem to promote quality market standards, advocate for enabling policies, and support the growth of member exchanges.

    According to him, this partnership will inspire and support African exchanges to unlock greater levels of competitiveness through information sharing and the adoption of best practices.

    “At the same time, we also expect that the partnership will offer WFE members a unique perspective on capital market issues and provide stakeholders in the global capital market with new prospects in the world’s ‘next frontier of growth’. We welcome this opportunity to enhance our value proposition to ASEA members’ and we encourage members of both associations to take advantage of emerging opportunities,” Onyema said.

    The WFE’s priorities and work streams include ongoing work on SMEs, FinTech, cyber resilience, CCP resilience, financial literacy, and sustainability. The WFE has a dedicated Emerging Markets Working Group which has focused on finding solutions for issues such as liquidity, enhancing retail participation, and attracting international investors.

    ASEA is an association of 28 securities exchanges in Africa; its exchanges are home to approximately 1,100 listed companies with a total equity market capitalisation of $1.5 trillion. ASEA’s main objective is to unlock the potential of African capital markets, and enhance the development and global competitiveness of member exchanges.

    Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 200 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of its members, 36.8 per cent are in Asia-Pacific, 42.6 per cent in Europe, Middle East and Africa (EMEA) and 20.6 per cent in the Americas.

    WFE exchanges are home to nearly 45,000 listed companies, and the market capitalisation of these entities is over $82.5 trillion; around $81.8 trillion in trading annually passes through the infrastructures WFE members safeguard at the last count.

    Seven African exchanges, out of a total of 70 WFE members, are full members of the WFE. These include Bourse de Casablanca, The Egyptian Stock Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange, Nigerian Stock Exchange, Stock Exchange of Mauritius and Tunis Stock Exchange. NSE became a full member of the WFE in 2014 while Bourse de Casablanca became a full member of the WFE in 2010. Five other African exchanges are affiliates. Overall, there are over 35 securities exchanges operating in Africa at different levels of maturity.

     

  • We are working to improve investors’ confidence, says SEC

    The Securities and Exchange Commission (SEC) said ongoing implementation of its 10-year master plan and introduction of many key initiatives would address loopholes and help to improve investors’ confidence in the Nigerian capital market.

    Speaking yesterday at the opening ceremony of the SEC Journalists Academy in Uyo, Akwa Ibom, Acting Director General, Securities and Exchange Commission (SEC), Mary Uduk, reaffirmed that the Commission remains committed to developing the capital market.

    Uduk, who spoke on the theme, “Capital Market Master Plan: The Journey So Far”, noted that as a result of the market crash in 2008, investors have lost confidence and are yet to return to the market.

    She noted that the market was dominated by the banking sector which constituted 60 per cent of the market as at 2003 to 2007.

    According to her, 15 out of 20 most capitalized companies were banks, and risk management and corporate governance was not developed enough to support the fast growth thereby leading to inappropriate market behavior and abuse of margin lending.

    She revealed that the Commission had focused on leading the market to recovery and part of the recovery plan was the development of the 10-Year Nigerian Capital Market Master Plan (2015-2025) in collaboration with other stakeholders to map out strategies to improve key areas especially investor protection and education, among others.

    She explained that SEC aims to expand capital market’s role in nation’s economy development in general.

    As part of the implementation, she said the Commission has ensured that all share certificates are fully dematerialized, meaning that physical share certificates are now fully converted into electronic form in Nigeria, which has further enhanced market efficiency and transparency.

    “The recapitalization of capital market operators was aimed at improving the baseline infrastructure of the CMOs, improves their market access and service delivery as well as enable them comply fully with the New Minimum Operating standard set by the Commission.

    “These were aimed at helping the market develop robust controls; strong governance framework and effective human capital. As at December 30, 2016 which was the deadline given for all CMOs to recapitalize, 384 out of 449 CMOs had fully complied. More of them have done so afterwards,” Uduk said.

    She explained further that the National Investor Protection Fund (NIPF) that was established to compensate investors for pecuniary losses, boost confidence and encourage the domestic retail investors back to the market.

    “In the same vein, the e-Dividend Mandate Management System (eDMMS) was developed to reduce the quantum of unclaimed dividends in the market and also enable direct payment of investors’ dividends into their nominated bank accounts. So far, 2.55 million accounts have been mandated under this system,” Uduk said.