The Nation Newspaper

Category: Equities

  • FBN Capital predicts positive outlook for equities in 2014

    Nigerian equities will witness modest positive outlook in 2014 as significant bullish rally yesterday added N179 billion in capital gains to market capitalisation of quoted equities and pushed the average year-to-date return at the Nigerian Stock Exchange (NSE) to 38.24 per cent.

    Analysts at FBN capital said they expected a modest multiple expansion in equities in 2014 with more impressive opportunities in sectors that had trailed below market average this year.

    Speaking at the second day of the FBN Capital’s Investor Conference in Lagos, Head, Equity Research, FBN Capital, Olubunmi Asaolu, said there could be “modest multiple expansion” in equities in 2014.

    According to him, there are attractive buy opportunities in the banking and industrial goods subsectors that could support the modest positive market outlook in 2014.

    He however noted that given the significant gain in the equity market in recent period, the risk-reward appears slightly more favourable in fixed income instruments than equities.

    He pointed out that consumer goods stocks, which had recorded above-average gains and were major market drivers, now look less attractive because they are within their ceiling range.

    Previewing the macro economy, Head, Macroeconomic and Fixed income Research, FBN Capital, Gregory Kronsten, said that Central Bank of Nigeria (CBN)’s cautious and tight monetary stance since 2010 will likely run through 2014.

    According to him, the outlook on real growth of the nation’s economy is expected to rise to 6.8 per cent from an expected 6.7 per cent at 2013 year end, compared with 6.6 per cent at year end 2012. Inflation is also predicted to rise to 8.0 per cent by the end of 2014, from an estimated 7.7 by the end of 2013. Inflation had closed 2012 at 12.0 per cent.

    “We see stability for the naira, a tight monetary stance and single digit inflation in the forecast period. The authorities believe firmly in offering positive returns in real terms. The main risk to this picture is not tapering, but a sharp fall in oil revenues. Our oil price projections however suggest that Nigeria will escape this fate,” Kronsten said.

    Aggregate market value of all quoted equities rose by N179 billion to close yesterday at N12.41 trillion as against its opening value of N12.236 trillion. Reflecting the significant bullish rally, the main index at the NSE, the All Share Index (ASI), rose by 1.46 per cent from 38,255.86 points to 38,815.64 points. The positive market situation pushed the year-to-date return at the stock market to 38.24 per cent.

    With nearly two advancers to every decliner and above-average turnover of 329 million shares, the market was overtly bullish as investors continued to hunt for values in the conglomerates, breweries, oil and gas and banking subsectors.

    Guinness Nigeria topped the 40-stock gainers’ list with a gain of N6.93 to close at N241.98. Total Nigeria trailed with a gain of N5.85 to close at N167.85. Dangote Cement followed with a gain of N5 to close at N195. Nigerian Breweries rose by N2.87 to close at N170. Cadbury Nigeria gathered N1.70 to close at N58.50. UAC of Nigeria added N1.69 to close at N66.69 while Oando gained N1.44 to close at N15.56 per share.

    On the downside, Forte Oil led 20 other stocks on the losers’ list with a drop of N5.78 to close at N109.86. PZ Cussons Nigeria lost 50 kobo to close at N37 while Mobil Oil Nigeria slipped by 45 kobo to N115.55 per share.

    Total turnover stood at N329 million shares valued at N3.71 billion in 4,626 deals. Transnational Corporation of Nigeria (Transcorp) remained the most active stock with a turnover of 56.51 million shares valued at N274.39 million in 334 deals. Transcorp’s share price rose by 45 kobo to N4.86 per share.

  • CBO Capital Partners emerges new core investor in Union Dicon Salt

    CBO Capital Partners has acquired significant equity stake in Union Dicon Salt (UDS) Plc to become a new core minority shareholder in the salt producing company.

    In a deal valuing the company at N8.40 billion, CBO Capital Partners acquired 41 million ordinary shares of UDS and also simultaneously acquired an option to purchase additional 240 million ordinary shares for a consideration of N3.36 billion.

    Both CBO Capital and Union Dicon Salt confirmed the deal in a statement made available to The Nation yesterday.

    Besides, CBO Capital, a Lagos-based investment and project development firm, has been given a management contract to turnaround UDS.

    The emergence of CBO Capital as a strategic investor and the management contract are expected to stimulate the recovery of the ailing salt company. The parties to the deals indicated that the turnaround programme for the company is being finalized with the current management of the company and implementation will commence in the first Quarter of 2014.

    According to the statement, the company is currently concluding on a variety of strategic options for a 2014 capital expenditure requirement of N4 billion, which would be announced soon.

    “We are glad to have CBO on board, to rejuvenate this great company, and we shall soon announce a strategy that will involve investment of billions of Naira over the next 24 months,” Managing Director, Union Dicon Salt, Colonel Henry Mgbemena (Rtd) said.

    Founding partner, CBO Capital, Bex Nwawudu, said CBO Capital was very conscious of the exceptional history of Union Dicon Salt and it would build on this to take the company to greater heights.

    According to him, the acquisition of equity stake in UDS was part of CBO Capital’s investment philosophy that focuses on dedicated development of Nigeria.

    “We are grateful to the board and management of Union Dicon Salt Plc for their outstanding professionalism during negotiations and we are proud to become shareholders of this illustrious company,” Nwawudu, who has been designated as new executive director in Union Dicon Salt, said.

    Union Dicon Salt, currently chaired by General Theophilus Danjuma (Rtd) was established in 1984 and was for a considerable period, it was the largest producer of salt in Nigeria. It has two factories, in Lagos and Port Harcourt, with a total installed production capacity of 700,000 metric tons per year.

    Apart from the production of the iodized salt edible salt and the processing of crude salt for wholesale, Union Dicon Salt Plc also manufactured industrial salt for detergent manufacture, animal feeds, leather tanning, and for oil wells and other drilling related operations.

    CBO Capital was established with the aim of servicing and supporting business growth in Africa. CBO Capital’s asset management subsidiary, CBO Investment Management (CBO IM) is currently raising a $250 million private equity fund for investment across the West African region.

    Meanwhile, Union Dicon Salt closed yesterday at the Nigerian Stock Exchange (NSE) at N4.22 as investors traded 33,442 shares valued at N148, 542 in nine deals. The overall market situation at the stock market remained bearish as aggregate market value of all quoted equities dropped by N56 billion under pressures from profit-taking transactions.

    Aggregate market value of all equities dropped from N12.124 trillion to N12.068 trillion. The All Share Index (ASI), which tracks all quoted equities, also slipped from its opening index of 37,949.11 points to close at 37,772.86 points.

    Highly capitalized stocks continued to be the main drivers of the downtrend in spite of substantial gains by several stocks. Nestle Nigeria again led the losers’ list with a loss of N31 to close at N1, 129. Dangote Cement followed with a drop of N3.25 to close at N185. Nigerian Breweries dropped by N3 to close at N170. Guinness Nigeria lost N2.10 to close at N233.01 while UAC of Nigeria declined by 50 kobo to N63.50 per share.

    Total turnover stood at 278.73 million shares valued at N2.93 billion in 4,359 deals. Transnational Corporation of Nigeria (Transcorp) remained the most active stock with a turnover of 37.18 million shares valued at N122.39 million in 168 deals.

    On the upside, Conoil sustained its uptrend with a gain of N7.05 to close at N76. MRS Oil and Gas followed with a gain of N4.42 to close at N47.63. Lafarge Cement Wapco Nigeria added N2 to close at N106. Total Nigeria rose by N1.89 to close at N162 while Oando and Guaranty Trust Bank added 55 kobo to close at N11.65 and N26.80 respectively.

  • Oil and gas stocks lead equities with 69.62% return

    •Costain reassures stakeholders over receivership scare
    •FirstBank confirms acquisition of West African bank

    Oil and gas stocks outflanked the industrial goods stocks to emerge as the sub-sector with the highest average year-to-date return at the stock market in a week that saw four oil and gas stocks among the 10 highest advancers.

    The stock market retained a week-on-week gain of 0.28 per cent last week after a weekend trading session characterised by emerging profit-taking shaved off 0.67 per cent from the market value. The main value-based common index at the Nigerian Stock Exchange (NSE), the All Share Index (ASI), closed the week with a gain of 0.28 per cent at 37,870.87 points compared with the week’s index on board of 37,765.82 points.

    Aggregate market value of all quoted equities similarly inched up from its opening value of N12.067 trillion to N12.100 trillion. But the week was overtly bullish for downstream oil and gas stocks, with the NSE Oil and Gas Index closing with average week-on-week gain of 14.16 per cent. The NSE Consumer Goods Index also rode on the back of gains by Nestle Nigeria and Cadbury Nigeria to close with a gain of 1.82 per cent. The NSE Insurance Index rallied 2.68 per cent while the NSE 30 Index, which tracks 30 most capitalised stocks, mirrored the weekend losses by highly capitalised stocks with a weekly gain of 0.17 per cent. However, the NSE Industrial Goods Index lost 0.98 per cent while NSE Banking Index dropped by 0.34 per cent during the week.

    The bullish performance last week pushed the oil and gas stocks ahead as the best-return sub-sector so far this year, ahead of the long-standing industrial goods sub-sector. Year-to-date analysis showed NSE Oil and Gas Index with a year-to-date return of 69.62 per cent, some eight percentage points above 61.52 per cent recorded by the NSE Industrial Goods Index. Other sectoral indices fell below average return at the stock market.

    While the ASI indicated average year-to-date return of 34.87 per cent, the NSE Consumer Goods Index posted a return of 32.82 per cent. The NSE 30 Index trailed with a return of 32.78 per cent. Financial services stocks were at the lower end of the returns. The NSE Insurance Index opens today with average year-to-date return of 18.46 per cent while the NSE Banking Index opens with 17.42 per cent.

    Total turnover last week stood at 1.83 billion shares worth N22.96 billion in 23,840 deals. The financial services industry remained the most active with a turnover of 1.34 billion shares valued at N12.80 billion traded in 12,795 deals, representing 72.93 per cent of total turnover volume.

    However, Transnational Corporation of Nigeria (Transcorp) of the conglomerate sub-sector was the most active stock. The trio of Transcorp, Wapic Insurance Plc and Zenith Bank Plc accounted for 737.81 million shares worth N5.01 billion in 3,369 deals, some 40.22 per cent of total turnover.

    Meanwhile, the board of directors of Costain (West Africa) Plc has said the management of the construction company remained in control of the operations of the company after it scaled through a receivership scare over indebtedness to First Bank of Nigeria (FBN) Limited.

    First Bank had obtained an order of court for the appointment of a receiver manager for Costain over a trade debt.

    In a regulatory filing at the NSE, directors of Costain stated that the company has since made payment to partially liquidate the debt and both parties have entered into agreements for the complete liquidation of the debt.

    The filing indicated that the receiver manager never acted on behalf of Costain pursuant to the court order and with the terms of settlement being reached; Costain does not envisage the implementation of the order of receivership.

     

     

     

  • Conoil sets new high on impressive earnings

    Conoil Plc recorded the highest gain at the stock market yesterday as increased demand for the equities of the downstream oil company pushed its market price to a new high of N51.48 per cent.

    Conoil’s share price rose by 10.24 per cent with the addition of N4.78 to close at N51.48. The upswing yesterday increased Conoil’s year-to-date return in the past 10 months and seven days to 151.12 per cent, significantly above the stock market’s average year-to-date return of 35.78 per cent.

    The gain, Conoil’s biggest advance in recent years, highlighted investors’ response to the third quarter corporate earnings report of the petroleum-marketing company. Conoil had shown the strongest improvement in profitability in the petroleum-marketing subsector.

    Nine-month report of Conoil for the period ended September 30, 2013 showed that pre and post tax profits rose by 341 per cent and 329 per cent respectively. While sales growth was modest at 6.0 per cent, the company had leveraged on increasingly efficient cost management and financing structure. Turnover rose to N121.80 billion in 2013 as against N114.77 billion in comparable period of 2012.

    Profit before tax jumped from N699.42 million to N3.08 billion while profit after tax leapt to N2.09 billion as against N487.22 million recorded in corresponding period of 2012. With these, earnings per share stood at N3.01 by September 2013 as against 70 kobo by September 2012.

    There is a strong expectation that Conoil will consolidate its performance during the fourth quarter. According to the directors of the oil-marketing company, full year profit could rise to about N4 billion by the end of this year. On the basis of this management guidance, earnings per share could rise to N5.76 by the year ended December 31, 2013.

    Market analysts yesterday said investors were taking positions in the oil stock on the back of the improved earnings and the commitment by the chairman of the company, Mr. Mike Adenuga (Jnr) that the company would deliver increased returns to shareholders.

    Management Conoil has said they expected to drive performance with projected 65 per cent revenue increase from its nationwide retail outlets, especially newly commissioned mega stations. Performance is also expected to be augmented by additional income streams from new lubricant products launched earlier in the year as well as expected 72 per cent increase in probable revenue from the fully-deregulated lubricant business. With its new production plant in Port Harcourt, Conoil plans to step up engine oil exports to West African markets as well as enter into joint venture partnerships with leading car manufacturing companies for the use of Conoil lubricants in their vehicle engines.  It also expects additional incomes from ancillary services including marketing of Low Pour Fuel Oil (LPFO) and Bitumen, which were reactivated in the first half of 2013 and are expected to boost sales in the second half.

    However, notwithstanding the preponderance of gainers to losers at 31 to 23, the depreciation in the share price of Dangote Cement moderated the overall market position yesterday. Aggregate market value of all equities inched up to N12.182 trillion from its opening value of N12,181 trillion. The All Share Index (ASI), which serves as benchmark for the equities market, inched up from 38,125.18 points to 38,125.91 points.

    Dangote Cement, stock market’s most capitalised stock, lost 1.31 per cent or N2.49 to close at N187.51 per share.

    Turnover at the stock market was above average with exchange of 511.20 million shares worth N5.65 billion in 5,128 deals.

  • Equities open with N58b loss as profit-taking gathers momentum

    Equities open with N58b loss as profit-taking gathers momentum

    Nigerian equities opened this week with renewed profit-taking transactions as investors sought to monetize accrued capital gains to hedge against likely shocks from unfavourable earnings reports.

    The stock market was obviously overwhelmed with the sell instincts with most stocks closing on the downside. Benchmark indices at the Nigerian Stock Exchange (NSE) indicated an average loss of 0.49 per cent, representing a loss of N58 billion.

    The downtrend yesterday depressed equities’ average year-to-date return to 32.76 per cent. The decline was driven by profit-taking and rebalancing transactions as investors adjust their valuations in line with earnings reports and projections.

    Most quoted companies are expected to release their third quarter reports in the next two weeks. Third-quarter reports released so far showed mixed performance with many companies struggling with constrained top-lines.

    Aggregate market capitalisation of all quoted equities closed at N11.911 trillion as against its opening value of N11.969 trillion. The All Share Index (ASI), the main index that tracks all equities on the NSE, slipped from 37,461.94 points to 37,278.34 points.

    Nigerian Breweries led 29 other stocks on the losers’ chart with a drop of N2.95 to close at N167.05. Cadbury Nigeria trailed with a loss of N2.78 to close at N53.72. Okomu Oil Palm and CAP lost N1.99 eaach to close at N44 and N47 respectively. PZ Cussons Nigeria declined by 50 kobo to N38.49. Access Bank slipped by 41 kobo to N9.98. Dangote Sugar Refinery dropped by 38 kobo to N11.05. MRS Oil and Gas lost 31 kobo to close at N37.25 while Oando dropped by 30 kobo to close at N37.25.

    Meanwhile, Lafarge Cement Wapco Nigeria rode on the crest of its impressive profit in the third quarter to a new high. Lafarge Wapco led the contrarian stock with a gain of N2.50 to close at N101. Guinness Nigeria followed with a gain of N2 to close at N240. Ashaka Cement placed third with a gain of 33 kobo to close at N21.50. Portland Paints and Products rose by 24 kobo to N5.24 while Cement Company of Northern Nigeria added 20 kobo to close at N9.95 per share.

    With the market on the downside, investors appeared to be holding to volumes. Aggregate turnover dropped below recent average with exchange of 241.40 million shares valued at N2.63 billion in 4,067 deals. Banking subsector accounted for 105.4 million shares valued at N867.37 million in 1,236 deals. Wapic Insurance was the most active stock with a turnover of 35.92 million shares worth N31.25 million in 44 deals.

    Transnational Corporation of Nigeria (Transcorp) followed with a turnover of 28.71 million shares worth N52.35 million in 170 deals.

  • Equities in tight trade as investors stake N1.4b on GTBank

    The stock market traded within a tight situation yesterday, with nearly a decliner for ever advancer, but gains by fast-paced downstream oil stocks and other highly capitalised stocks sustained the overall bullish market position.

    Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) rose from N11.939 trillion to close at N11.952 trillion, indicating a gain of N13 billion. The All Share Index (ASI), the main index that tracks changes in prices of all equities, inched up to 37,408.56 points as against its opening index of 37,368.10 points.

    The market situation was headlined by gains in the petroleum-marketing sector and losses in the breweries and fast moving consumer goods sectors. Upsurge in market orders for Guaranty Trust Bank (GTBank) also boosted the total turnover.

    Three downstream oil stocks-Conoil, Forte Oil and Mobil Oil Nigeria ranked within the five highest gainers. Conversely, the two largest breweries-Nigerian Breweries and Guinness Nigeria ranked within the top five losers.

    Nestle Nigeria, market’s highest priced stock, consolidated its position with the highest gain of N40 to close at N1,050. Conoil placed second with a gain of N4.14 to close at N44.62. CAP followed with addition of N3.97 to close at N42.82. Forte Oil chalked up N3.67 to close at N74.55. Mobil Oil gathered N2 to close at N120. UACN Property Development Company garnered 78 kobo to close at N17.47. Ashaka Cement rose by 35 kobo to close at N22.90 while Dangote Flour Mills added 19 kobo to close at N9.40.

    On the other hand, Nigerian Breweries led the losers with a drop of N2 to close at N174. PZ Cussons Nigeria lost N1.47 to close at N40. Guinness Nigeria dropped by N1.02 to close at N245. Unilever Nigeria dipped by 62 kobo to close at N60. National Salt Company of Nigeria slipped by 18 kobo to close at N12.11. GTBank lost 17 kobo to close at N25.13. Honeywell Flour Mills dropped by 14 kobo to N2.95 while Zenith Bank lost 13 kobo to close at N21.42 per share.

    Aggregate turnover was above average at 358.98 million shares valued at N4.16 billion in 5,253 deals. Banking subsector was the most active stock with a turnover of 154.36 million shares valued at N2.14 billion in 1,610 deals. Turnover in the banking subgroup was driven by GTBank, which emerged second most active stock with a turnover of 53.42 million shares valued at N1.35 billion in 312 deals. Transnational Corporation of Nigeria was the most active stock with 56.39 million shares worth N98.97 million in 218 deals. Unity Kapital Insurance recorded a turnover of 30.01 million shares valued at N15 million in nine deals.

  • Investors scramble for oil stocks

    Investors scramble for oil stocks

    •Equities resume trading with bullish strides

    Investors returned to the stock market yesterday with renewed optimism about the prospects of quoted equities. Trading resumed yesterday at the Nigerian Stock Exchange (NSE) after a two-day public holiday to celebrate Eid-ul-Kabir, Muslim’s largest festival.

    The market mood was bullish as investors scrambled for petroleum-marketing stocks and other highly capitalised stocks. Four out of the five downstream majors recorded considerable gains, a rally that helped the market to sustain its rising capitalisation.

    The main index at the NSE, the All Share Index (ASI), rallied to 37,257.35 points from its opening index of 37,051.14 points. Aggregate market capitalisation of all equities rose by N66 billion from N11.804 trillion to N11.870 trillion.

    With nearly two advancers to a loser, the market position reflected both the preponderance of gainers and gains recorded by several highly capitalised stocks. Petroleum-marketing stocks led the bullish rally. Total Nigeria rose by N6.51 to close at N164. Forte Oil trailed with a gain of N5.41 to close at N58.33. Guinness Nigeria placed third with a gain of N3.45 to close at N250. Conoil added N1.51 to close at N31.75. Cadbury Nigeria chalked up N1.09 to close at N55. The trio of Flour Mills of Nigeria, Mobil Oil Nigeria and Dangote Cement added N1 each to close at N83, N119 and N190 respectively. Lafarge Cement Wapco Nigeria and UAC of Nigeria rose by 50 kobo each to close at N99 and N63 respectively. International Breweries garnered 48 kobo to close at N20.99 while Guaranty Trust Bank rose by 43 kobo to N25.53 per share.

    On the other hand, Ashaka Cement led the losers with a drop of N1 to close at N22. Okomu Oil Palm dropped by 55 kobo to N44.95. Zenith Bank lost 21 kobo to close at N21.63. University Press declined by 15 kobo to N3.85 while IHS slipped by 14 kobo to N2.66.

    Market activity was above the average with investors indicating strong demand for banking stocks. Access Bank was the most active stock with a turnover of 36.84 million shares valued at N384.47 million in 280 deals. Guaranty Trust Bank trailed with a turnover of 33.28 million shares worth N847.36 million in 509 deals. Transnational Corporation of Nigeria was the most active stock with a turnover of 31.94 million shares valued at N53.03 million in 215 deals.

    Total turnover stood at 284.1 million shares worth N3.89 billion in 4,950 deals. Banking subgroup accounted for 141.20 million shares valued at N1.84 billion in 1,865 deals.

  • Securities regulators raise concerns on market risks

    World capital market regulators have outlined key concerns and risks that will highlight the global market trend between now and 2014, in a proactive effort to identify and deal with risks and strengthen the systemic framework of the global securities market.

    In its maiden Securities Markets Risk Outlook 2013-2014 released yesterday, the International Organisation of Securities Commissions (IOSCO), highlighted important trends, vulnerabilities and risks in securities markets that may be of concern from a systemic perspective. IOSCO is the global body of securities regulators and its members regulate more than 95 per cent of the world’s securities markets.

    The report was a joint effort between the IOSCO Research Department and the Committee on Emerging Risks (CER), which is comprised of senior researchers, chief economists and risk officers of almost 30 securities markets regulators from around the world.

    The information and data for the report were drawn from extensive consultation with experts, industry and other market participants; a survey to regulators, industry and academics; roundtables; and robust data analysis and literature review, altogether underlining the robustness of the report.

    According to the IOSCO, the outlook, in its maiden edition, will now be published annually with the aim of providing securities regulators with the information they need to adopt a forward looking approach in dealing with potential vulnerabilities and risks to global securities markets and the global financial system as a whole.

    The report identified and dealt extensively with four main risks including the interest rate risk, collateral management risk, derivatives risk and emerging market capital risk.

    The report noted that expansionary monetary policies have reduced interest rates to the point that real rates are at times negative pointing out that while these policies may help stimulate the real economy, the spill-over effects may create potential risks for securities markets.

    According to the report, a search for yield is turning investors towards leverage products such as CDO´s and leveraged real estate investment funds.

    “In response to global policy requirements, demand from investment firms for high quality collateral has increased significantly. More generally, bank holding companies with over the counter (OTC) dealer operations must locate high-quality collateral to meet initial and variation margin requirements for their OTC trades. Additionally, central banks have been absorbing collateral to provide needed bank funding. This growing demand has altered the balance of collateral in the system, diminishing availability of high-quality collateral and could impact pricing,” it stated in reference to collateral management risks.

    The report indicated that the OTC derivatives markets have undergone significant reform since the financial crisis including the mandatory clearing of derivative contracts through central counterparties (CCPs).

    It however noted that while CCPs are designed to reduce systemic risk in the derivatives market by reducing counterparty risk, shifting the risk from bilateral OTC contracts to a single point of infrastructure is a challenging balancing act.

    The report outlined concerns about the capital flows of emerging market, which have experienced significant capital inflows in the post-crisis era.

    According to the report, debt securities and non-bank lending have overtaken foreign direct investment and banking lending as the main source of these capital inflows. After the announcement of the tapering of the expansionary monetary policies of the US Federal Reserves, a sudden reversal in capital inflow occurred, highlighting the need for further structural reforms aimed at making securities markets more resilient.

    Chairman, board of IOSCO, Greg Medcraft, presented the Outlook in London. Accompanying him were IOSCO Secretary General, David Wright, Vice-Chair of the Growth and Emerging Markets Committee, Bert Chanetsa, the Chair of the Committee on Emerging Risks, Carlos Tavares, and the Chair of the IOSCO Africa/Middle-East Regional Committee, Nigeria’s Arunma Oteh.

    Medcraft said the report was a great example of IOSCO being proactive, forward looking and ahead of the curve in assisting securities regulators to achieve its objectives of protecting investors, ensuring markets are fair, efficient and transparent and reducing systemic risk.

    “I would urge all IOSCO members and policy makers globally to carefully reflect on the outlook’s observations and understand – and act on – the implications of the trends and risks it identifies for their markets,” Medcraft said.

  • No biometrics, no share transaction, says Stock Exchange

    No biometrics, no share transaction, says Stock Exchange

    Individual and institutional investors will henceforth have to submit for biometric identification before they could buy or sell shares at the Nigerian stock market, according to new rules being proposed by the Nigerian Stock Exchange (NSE).

    A draft copy of amendments to rules governing operations and operators at the stock market obtained at the weekend by The Nation showed that all stockbrokers will now be required to obtain the biometrics of all their clients in a new rule being proposed by the NSE.

    In what may have far-reaching implication at the market, NSE indicated biometric identifiers to be obtained “shall include finger prints and iris recognition and the information collected shall be applied towards confirming clients’ identities”.

    While individual investors will have to provide biometrics on every account, corporate entities will provide corporate information as well as biometrics of the authorized signatories to their share trading accounts.

    “No Dealing Member shall open, accept and/or operate a share trading account or otherwise deal in any manner whatsoever, on behalf of any person or entity unless the biometrics of such person or authorized signatories of the entity have been collected by the firm,” the new rules stated.

    According to the proposed rules, any stockbroker that fails to obtain the biometrics of its clients and obtain adequate know-your-client documentation from its clients shall be suspended from trading forthwith until regularization is effected.

    Besides, an investor will have to provide a minimum of three identifications to meet the new score-based criteria for opening of account, under one of the new rules.

    NSE is proposing a clients points system under which stockbrokers will have to ensure that an investor score a minimum of 10 points to be eligible to hold an account.

    In obtaining the data of its clients for identification purposes, every dealing member is expected to apply the “Clients Points System”, with the points awarded according to predetermined grade of the Exchange.

    According to the rules, international passport caries the highest grade of five points, national identity card carries four points, driver’s license obtains two points, utility bill accrues two points, voters card entitles to a point while employee’s photo identification card issued by recognized employer with employer’s tax identification from the Federal Inland Revenue Service obtains two points.

    Stockbrokers are also expected to obtain their clients’ investment objectives and they must identify the categories of investors under foreign, local retail or institutional investor.

    In addition to compliance with extant rules and laws on money laundering, stockbroking firms are also expected to have an anti-money laundering policy and train their employees on the prevention and detection of money laundering and other related activities as may be prescribed by the Exchange from time to time.

    Besides, brokers are expected to disclose to the NSE on a quarterly basis and in a prescribed format all proprietary accounts held by it whether directly or indirectly and with other stockbroking firms

     

  • NSE switches to new trading engine

    NSE switches to new trading engine

    The Nigerian Stock Exchange (NSE) plans to start trading on its new trading platform, otherwise known as X-GEN, from this week.

    X-GEN has been described as a high performance, robust and scalable, multi-asset, multi-market matching trading engine that will leapfrog the NSE as one of the most technologically advanced markets in Africa and global emerging markets.

    Chief executive officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, confirmed the readiness of the NSE to start trading on the new platform.

    According to him, the Exchange has had a series of market readiness tests and created a new market structure that is world class, which would facilitate the cutover to the new platform.

    Executive director, market operations and technology, Nigerian Stock Exchange (NSE), Mr. Ade Bajomo, noted that the Exchange has a great confidence in the new platform pointing out that three market readiness tests were successfully executed over the past five weeks.

    According to him, with focus on the performance of the trading engine and integration of all interfaces including remote users coming in through the fix gateway, brokers and NSE technical team were able to successfully place orders, migrate data and complete a series of full dress rehearsal.

    “It is exciting that we are able to execute and test all our tasks and are confident with the results. This is the first country in West Africa to adopt this highly sophisticated trading system. As we all know, the trading system is at the heart of any exchange and the shifting to the new platform and ensuring its smooth transition was a key priority for the NSE,” Bajomo stated.

    He said the NSE was extremely delighted to co-operate with Nasdaq, LasalleTech and its several partners to adopt the cutting-edge platform.