…Reiterates commitment to developing capital market
…As 384 out of 449 CMOs complied with recapitalisation
…Market indicators extend losing streak by 1.33%
The Security and Exchange Commission (SEC) has said a total of 2.55 million accounts have been mandated under the e-Dividend Mandate Management System (eDMMS), making investors to receive their dividends payment directly from their banks electronically.
The eDMMS was developed to reduce the quantum of unclaimed dividends in the market and enable direct payment of investors’ dividends into their nominated bank accounts.
Acting Director General of SEC, Mrs. Mary Uduk, in her keynote address at the 2018 Journalists Academy organised by the Commission in Uyo, the Akwa Ibom capital, said that from 2008 to date, the Commission had focused on leading the market to recovery.
“Part of the recovery plan was the development of the 10-Year Nigerian Capital Market Master Plan (2015-2025) by the Commission in collaboration with other stakeholders to map out strategies to improve key areas
especially investor protection and education, professionalism, product innovation, and for the expansion of the capital market’s role in Nigeria’s economy,” the SEC boss stated.
The DG reiterated SEC’s resolve to remain committed to developing the nation’s capital market in line with the 10-Year Master Plan.
With 101 initiatives, the Master Plan has the potential to expedite the implementation of the nation’s economic agenda, she said.
She further revealed that the Commission, alongside other major stakeholders, has succeeded in implementing many of the initiatives of the Master Plan.
“We have ensured that all share certificates are fully dematerialised. This is to say that physical share certificates are now fully converted into electronic form in Nigeria. This initiative has further enhanced the market efficiency and transparency”, Uduk added.
Speaking further, she explained that the recapitalisation of Capital Market Operators (CMOs) was aimed at improving the baseline infrastructure of the CMOs, improve their market access and service delivery as well as enable them comply fully with the New Minimum Operating standard set by the Commission.
These, the DG said, were aimed at helping the market develop robust controls; strong governance framework and effective human capital.
Mrs. Uduk said: “As at December 30, 2016 which was the deadline given for all CMOs to recapitalise, 384 out of 449 CMOs had fully complied.
The National Investor Protection Fund (NIPF) was established to compensate investors for pecuniary losses, boost their confidence and encourage the domestic retail investors back to the market.”
She recalled that between 2003 and 2007, growth was rapid and regulation-induced. Market capitalisation increased by over 66 per cent CAGR from N1.4 trillion to N10.2 trillion.
“In March 2008, market capitalisation reached a then all-time high of N12.6 trillion. Specifically, in 2005/2007, recapitalising banks and insurance companies raised over $10 billion from the capital market.
“To further boost investors’ confidence, enhance transparency and eliminate fraud in the market, the Direct Cash Settlement (DCS) initiative was introduced.
DCS is an initiative that allows proceeds from sale of investors’ shares to settle directly into their account as against the system whereby the proceeds go to broker’s account before passing it to the investor,” she stated.
Uduk maintained that the commission was still on the implementation process of several initiatives in addition to the above mentioned achievements.
“Amongst these are integration of the Nigerian Capital Market into the West African Capital Market Integration Programme, establishment of National Savings Strategy, establishment of the Industry-Wide Technology Infrastructure, development of Sound Commodities Trading Ecosystem,
demutualization of the Nigerian Stock Exchanges, promoting New Listings, infusion of Capital Market Studies into School Curriculum, among others,” the Director General stated.
Meanwhile, the Commission has reaffirmed that it remains committed to developing the capital market in line with the 10-Year Master Plan.
The acting DG pointed out that the Commission with 101 initiatives has the potential to expedite the implementation of the 10 year- master plan.
Uduk noted that the market was highly concentrated and 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 capitalised companies were banks, adding that risk management and corporate governance was not developed enough to support the fast growth thereby leading to inappropriate market behaviour 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.
In a related development, the Nigerian equities market closed lower on Thursday with further decline of 1.33 per cent to extend losing streak to five consecutive transactions days.
The All Share Index (ASI) was down by 411.92 absolute points, representing a decrease of 1.33 per cent, closing at 30,611.55 against 31,023.47 achieved on Wednesday.
Similarly, the market capitalisation decreased by N150 billion or 1.33 per cent to close at N11.175 trillion compared with N11.325 trillion.
The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are Dangote Cement, Guaranty Trust Bank, Cadbury Nigeria, United Bank for Africa (UBA) and FBN Holdings.
Analysts at Afrinvest Limited said: “Although, we observed a bearish performance since the beginning of the week, we expect an uptick in market trading session in days ahead, as investors seek to increase buying interests in fundamentally justified stocks which have declined in value.
“However, we do not expect the uptick to nullify the overall negative performance of the local bourse.”
Market breadth remained negative, with 23 gainers and 12 losers.
Dangote Cement recorded the highest loss during the day, dropping by N5 to close at N185 per share.
Guaranty Trust Bank trailed with a loss of N1.30 to close at N34.30, while Cadbury shed 50k to close at N9.50 per share.
United Bank for Africa was down by 30k to close at N7.05, while Lafarge Africa dropped by 30k to close at N13.05 per share.
Conversely, Access Bank led the gainers’ table, growing by 50k to close at N7.50 per share.
Nigerian Breweries followed with a gain of 40k to close at N9.40, while Forte Oil gained 30k to close at N17.65 per share.
Ikeja Hotel improved by 15k to close at N1.68, while Continental Reinsurance appreciated by 13k to close at N2 per share.
Total volume of trades grew by 100.4 per cent to 441.61 million shares valued at N4.46 billion in 3,648 deals.
This was against the 220.40 million shares worth N N2.73 billion exchanged in 3,252 deals.
Universal Insurance dominated trading activities with 150.1 million shares valued at N30.01 million.
Access Bank followed with 73.57 million shares worth N503.01 million, while Stanbic IBTC Holdings traded 43.91 million shares valued at N2.2 billion.
Diamond Bank transacted 41.31 million shares worth N27.51 million, while Zenith Bank transacted 22.29 million shares worth N515.23 million.