Economy
Direct Cash Settlement Will Boost Investors’ Confidence—NSE
**Educates Stakeholders on Dematerialisation, Others
By Modupe Gbadeyanka
Executive Director of Market Operations and Technology at the Nigerian Stock Exchange (NSE), Mr Ade Bajomo, has disclosed that the direct cash settlement system will enhance investors’ confidence because proceeds from the sale of securities are remitted directly into investors’ accounts.
He made this disclosure last week at an enlightenment programme organised by the NSE for capital market stakeholders on dematerialization, direct cash settlement and e-dividend.
The event, tagged Investor Clinic and themed ‘The role of Dematerialization, Direct Cash Settlement and E-dividend in the development of the Nigerian Capital Market,’ took place at the Stock Exchange House, Lagos.
It was targeted at sensitizing the investing public and brokerage community of contemporary initiatives in the market.
The programme shed light on the importance of dematerialisation as a necessity in the trading of shares.
Participants were also made to understand the advantages of direct cash settlement and e-dividend processing in the consolidation of returns on their equity investment as well as the overall benefits to the Nigerian capital market.
“The NSE Investor Clinic brings to the fore the importance of dematerialisation in ensuring improved market velocity and integrity as well as the role of direct cash settlement in enhancing investor confidence by ensuring that proceeds from the sale of securities are remitted directly into investors’ accounts,” Mr Bajomo said.
He stressed the importance of e-dividend in not only reducing the perennial issue of unclaimed dividend growth, but in ensuring that investors derive the full benefits of their investments by having their dividends paid directly into their bank accounts as soon as these are disbursed by issuers, regardless of whether these are savings or current accounts.
He added that, “At The Nigerian Stock Exchange, we are committed to improving overall financial literacy and inclusion in the country, and ensuring we implement efficient processes that provide investors easy and intuitive access to grow their wealth.
“This commitment is expressed in the various initiatives undertaken by The Exchange. In 2016 alone, we executed over 200 free capacity building workshops, aimed at enhancing investor understanding of the workings of the capital market.
“The multiplier effect of these workshops is phenomenal, as over 25,000 participating investors have been equipped to make better investment decisions”.
Over 200 participants attended the NSE Investor Clinic which had seasoned and certified subject matter experts, such as Mr Henry Rowlands, Director, Capital Market Development, Securities and Exchange Commission; Mr Seyi Owoturo, CEO, United Securities Limited and Mr Kenneth Nwafor, Operations Manager, Market Operations NSE as facilitators.
It will be recalled that the Exchange on June 1, 2017, launched X-Academy, its financial literacy and inclusion platform designed to provide education services to individual, corporate and government institutions who want to gain a better understanding of the various aspects of the capital markets and also improve overall corporate governance within their respective institutions. X- Academy offers a wide range of courses geared towards bridging the knowledge gap of investors and issuers about products and services of the capital market.
It is also a platform to enhance financial literacy and inclusion and build on our track record of pushing the boundaries of financial education in Nigeria across all segments of investors.
This edition of the NSE Investor Clinic which was sponsored by ARM Pension Fund Managers Limited and Africa Prudential Registrars Plc.
By Aduragbemi Omiyale
Secure Electronic Technology (SET) Plc is planning to reconstruct its shares at the Nigerian Exchange (NGX) Limited by merging four stocks into one.
However, this exercise is subject to the approval of shareholders of the company and the board is proposing an Extraordinary General Meeting (EGM) to be held on or before April 17, 2025.
Business Post reports that the decision to reconstruct the shares of the organisation was reached at the board meeting of the firm on Friday, MArch 7, 2025.
In a notice to the stock exchange, SET Plc said it was agreed that the proposed share reconstruction and recapitalisation of the company shall be by way of one or a combination of the following; an offer for subscription, rights offering or private placement, upon terms agreed by both parties under the definitive agreement.
It further said, “The issued and share capital of the company be reduced from N2,815,770,000, represented by 1,407,885,000 ordinary shares of 50 Kobo each, subject to the approval of the Federal High Court, Securities and Exchange Commission (SEC), and relevant regulatory authorities.”
“This restructuring share result in the cancellation of 4,223,655,000 units of shares and the portion of the share capital cancelled, being valued at N2,111,827,500 be transferred to a special reconstruction reserve,” it noted.
The disclosure also said, “There shall be a proportional upward adjustment in the share price of SET on the NGX to be reflected after the conversion, so that the value of one converted share shall be equal to the market price of four pre-reconstruction shares, and at the end of the reconstruction, SET market capitalisation and each shareholder’s percentage holding shall remain unchanged.”
The company emphasised that it would “consolidate its issued shares at a basis of 1 for 4 ratio, meaning every four shares of SET Plc currently held by a shareholder shall be converted to one share and shareholdings that result in fractional shares post-reconstruction shall be rounded up to the nearest whole number.”
It was disclosed that this exercise was suggested by Gamma Civic Limited, a part of Gamma Group, a company listed on the Mauritius Stock Exchange and represented by Cruzan Investment Limited, a company incorporated in Nigerian under the Companies and Allied Matters Act 2020.
By Adedapo Adesanya
FrieslandCampina Wamco Nigeria Plc brought down the NASD Over-the-Counter (OTC) Securities Exchange by 0.06 per cent on Wednesday, March 12.
Business Post reports that the share price of FrieslandCampina Wamco Nigeria Plc slumped by N1.26 during the session to N37.45 per unit from the preceding day’s N38.71 per unit.
However, Geo-Fluids Plc gained 27 Kobo to trade at N2.95 per share versus Tuesday’s closing price of N2.68 per unit, and First Trust Microfinance Bank Plc appreciated by 3 Kobo to close at 56 Kobo per share, in contrast to the previous day’s rate of 53 Kobo per share.
When the platform ended trading activities yesterday, its value went down by N1.17 billion to settle at N1.955 trillion compared with the preceding day’s N1.956 trillion and the NASD Unlisted Security Index (NSI) decreased by 2.03 points to close at 3,385.50 points, in contrast to the previous trading day’s 3,387.53 points.
The volume of securities traded at the bourse dropped by 36.3 per cent to 298,845 units from the 469,185 units published on Tuesday, the value of securities decreased by 4.8 per cent to N10.4 million from the N10.9 million quoted at the preceding session, and the number number of deals moderated by 34.2 per cent to 25 deals from 38 deals.
At the close of business, Impresit Bakolori Plc was the most active stock by value (year-to-date) with 533.9 million units worth N520.9 million, followed by FrieslandCampina Wamco Nigeria Plc with 12.5 million units valued at N484.0 million, and Afriland Properties Plc with 17.2 million units sold for N352.8 million.
Also, Impresit Bakolori Plc was the most active stock by volume (year-to-date) with 533.9 million units worth N520.9 million, trailed by Industrial and General Insurance (IGI) Plc with 69.9 million units sold for N23.7 million, and Afriland Properties Plc with 17.2 million units valued at N352.8 million.
By Aduragbemi Omiyale
The House of Representatives has passed Nigeria Insurance Industry Reform Act, 2024, repealing Act, Cap 117, Laws of the Federation of Nigeria, 2004; the Marine Insurance Act, Cap M3, Laws of the Federation of Nigeria, 2004; The Motor Vehicle (Third Party) Insurance Act, Cap M22, Laws of the Federation of Nigeria, 2004; the National Insurance Corporation of Nigeria Act, Laws of the Federation of Nigeria, 2004 and the Nigerian Insurance Reinsurance Corporation Act, Cap N131, Laws of the Federation of Nigeria, 2004.
At the plenary on Wednesday, the green chamber of the National Assembly approved some conditions the operating licence of an insurance company can be revoked by the National Insurance Commission (NAICOM).
The new piece of legislature, which provides for a comprehensive legal and regulatory framework for insurance business in Nigeria, was enacted yesterday after the consideration of the Senate bill.
During the presentation by House Leader, Mr Julius Ihonvbere, yesterday, for a clause-by-clause consideration, it was agreed that NAICOM can withdraw the licence of an insurer or reinsurer if it is not conducting insurance business in accordance with sound insurance principles.
In addition, this action can be carried out if the licence holder has “failed to satisfy the capital or solvency requirement as prescribed by the commission and has ceased to carry on the business of insurance and the primary purpose for which it was registered for at least one year in Nigeria.”
The lower chamber of the parliament also concurred with the Senate that for obtaining an operating licence, “An application for licensing as an insurer shall be made to the commission in the prescribed form and accompanied by such other documents or information as the commission may from time to time require.
“The commission shall publish and make available to the general public a service charter which shall provide for products and services of the commission and the complete list of requirements to obtain the products and services.”
However, no person or organisation is allowed to “commence or carry out insurance, reinsurance or related business in Nigeria unless licensed by the commission as an insurer or a reinsurer under this bill.”
NAICOM was given the power to “regulate the insurance industry [in Nigeria] in order to develop the insurance sector and to protect the interest of policyholders, prospective policyholders and other stakeholders under insurance policies in ways that are consistent with the continued development of a viable, competitive and innovative insurance industry.”
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