Economy
How Operators, Companies Plotted to Dupe Investors in 2008—SEC DG
By Dipo Olowookere
Prior to the crash of the global economy in 2008, the Nigerian capital market was the darling of many local investors, attracting many people, with good amount of money made by regulators, investors, stockbrokers and companies. It was a time money was flowing in the country like a river.
But in this, some investors had a very sad tale to tell because they lost huge amount of money during the period, which the country may never experience again.
Companies were listing their shares on the Nigerian Stock Exchange (NSE) at premium rates and some others promised to join the exchange after private placements, which never came.
Last week, the Securities and Exchange Commission (SEC) held a joint conference with the Department of Finance of the University of Lagos (UNILAG) and the acting Director General of the agency, MS Mary Uduk, explained why some investors became victims of private placement ‘fraud’ during the period.
Commenting on the private placement bubble of 2007 and 2008, the head of the apex regulator in the nation’s capital market said this happened with the connivance of many market operators who encouraged issuers to take advantage of loopholes in the relevant investment laws at the time.
She lamented a situation where many private companies took advantage of gaps in Nigerian laws, especially between 2007 and 2008 to defraud many investors, by embarking on private placements, with promises to list the shares for trading on the Nigerian Stock Exchange, when in reality they had no such intention.
Ms Uduk recalled several efforts and appeals to such issuers, to list their shares without success, stressing that “market operators encouraged private placements knowing that the law did not allow the SEC to regulate private companies.”
“Insider trading is what we have to prove. A lot of us are in the market and we have whistle blowing mechanism. It is the operators who will be in a better position to know and report such infractions. For those that have been reported to us, we have been carrying out investigations and once we have evidence, we will invite them and also refer them to the relevant authorities
“With the whistle blowing provision, we have always asked operators in the market to come to our aid if they find any unwholesome activity going on. It is our market and so we all have to do our bit. The market should not be left to us alone; you need to provide information for us to take the necessary actions.
“Anyone that is caught engaging in any activity that is against the laid down rules, be rest assured that such an operator will be made to face the full wrath of the law,” she declared.
She urged operators to cooperate with the commission for the good of the market and the economy, realizing that “it is our market, please let us join hands and revive this market.
“Let us come together and sanitise this market,” she stressed, urging them to bring incidences of market abuse to the attention to the commission and enjoy protection under the law.
Ms Uduk said SEC has been doing its best to ensure that offenders are not left off the hook, hence the Commission is collaborating with EFCC and office of attorney general to be able to do much.
The DG has assured investors that the commission was committed to ensuring that suspicious transactions are not allowed in the capital market.
“We are committed to protecting investors in the work we do. We will keep working on our rules and the possibility of amending them when the need arises, we want more transparency in the market so that investors will feel comfortable and the market can be better,” she added.
The Acting DG said the commission also has the complaints management framework that enables investors to know where to complain to and how long it takes for such complaints to be resolved and for those of the investors that are averse to risks, they are advised to get their financial advisers to tell them where to invest.
“In doing all these, we advise retail investors to invest in Collective Investment Schemes and Mutual Funds because those are managed independently by professionals and they are diversified thereby reducing risks. We also implore investors to take ownership of their investments. They have to be able to monitor their investments, attend annual general meetings as well as read the annual reports sent out to them.
By Dipo Olowookere
Investors at the Nigerian Exchange (NGX) Limited have continued to show excitement for the full-year earnings of companies on the exchange so far.
On Friday, Customs Street further appreciated by 1.01 per cent as more organization released their financial statements for the 2025 fiscal year.
During the session, traders continued their selective trading strategy, with the energy sector going up by 2.47 per cent at the close of business despite profit-taking in the banking counter, which saw its index down by 0.11 per cent.
Yesterday, the insurance space grew by 2.16 per cent, the industrial goods segment expanded by 1.70 per cent, and the consumer goods industry jumped by 0.42 per cent.
Consequently, the All-Share Index (ASI) increased by 1,722.13 points to 171,727.49 points from 170,005.36 points, and the market capitalisation soared by N1.106 trillion to N110.235 trillion from the N109.129 trillion it ended on Thursday.
Business Post reports that there were 59 appreciating stocks and 19 depreciating stocks on Friday, representing a positive market breadth index and strong investor sentiment.
The trio of Omatek, Deap Capital, and NAHCO gained 10.00 per cent each to sell for N2.64, N6.82, and N136.40 apiece, as Zichis and Austin Laz appreciated by 9.98 per cent each to close at N6.72 and N5.40, respectively.
Conversely, The Initiates depreciated by 9.74 per cent to N19.45, DAAR Communications slumped by 7.32 per cent to N1.90, United Capital crashed by 6.55 per cent to N18.55, Coronation Insurance lost 5.71 per cent to quote at N3.30, and First Holdco shrank by 5.53 per cent to N47.00.
The activity chart showed an improvement in the activity level, with the trading volume, value, and number of deals up by 33.77 per cent, 93.27 per cent, and 10.63 per cent, respectively.
This was because traders transacted 953.8 million shares worth N43.1 billion in 51,005 deals compared with the 713.0 million shares valued at N22.3 billion traded in 46,104 deals a day earlier.
Fidelity Bank was the most active with 92.4 million units sold for N1.8 billion, Chams transacted 69.2 million units valued at N310.9 million, Deap Capital exchanged 59.1 million units worth N382.7 million, Access Holdings traded 57.2 million units valued at N1.3 billion, and Tantalizers transacted 48.6 million units worth N228.2 million.
By Adedapo Adesanya
The value of the Naira contracted against the United States Dollar on Friday by 13 Kobo or 0.01 per cent to N1,366.19/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) from the previous day’s value of N1,366.06/$1.
According to data from the Central Bank of Nigeria (CBN), the Nigerian currency also depreciated against the Pound Sterling in the same market window yesterday by N2.37 to N1,857.75/£1 from the N1,855.38/£1 it was traded on Thursday, and further depleted against the Euro by 57 Kobo to close at N1,612.52/€1 versus the preceding session’s N1,611.95/€1.
In the same vein, the exchange rate for international transactions on the GTBank Naira card showed that the Naira lost N8 on the greenback yesterday to N1,383/$1 from the previous day’s N1,375/$1 and at the black market, the Nigerian currency maintained stability against the Dollar at N1,450/$1.
FX analysts anticipate this trend to persist, primarily influenced by increasing external reserves, renewed inflows of foreign portfolio investments, and a reduction in speculative demand.
In the short term, stability in the FX market is expected to continue, supported by policy interventions and improving market confidence.
Nigeria’s foreign reserves experienced an upward trajectory, increasing by $632.38 million within the week to $46.91 billion from $46.27 billion in the previous week.
The Dollar appreciation this week appears to be largely technical, serving as a correction to the substantial losses experienced from mid- to late January.
Meanwhile, the cryptocurrency market slightly appreciated, with Bitcoin (BTC) climbing near $68,000, up nearly 5 per cent since hitting $60,000 late on Thursday after investor confidence in crypto’s utility as a store of value, inflation hedge, and digital currency faltered.
The sell-off extended beyond crypto, with silver plunging 15 per cent and gold sliding more than 2 per cent. US stocks also fell.
The latest recoup saw the price of BTC up by 4.7 per cent to $67,978.96, as Ethereum (ETH) appreciated by 6.3 per cent to $2,021.10, and Ripple (XRP) surged by 9.5 per cent to $1.42.
In addition, Solana (SOL) grew by 7.3 per cent to $85.22, Cardano (ADA) added 6.1 per cent to trade at $0.2683, Dogecoin (DOGE) expanded by 5.4 per cent to $0.0958, Litecoin (LTC) rose by 5.2 per cent to $53.50, and Binance Coin (BNB) jumped by 2.3 per cent to $637.79, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher on Friday as traders worried that this week’s talks between the US and Iran had failed to reduce the risk of a military conflict between the two countries.
Brent crude futures traded at $68.05 a barrel after going up by 50 cents or 0.74 per cent, and the US West Texas Intermediate (WTI) crude futures finished at $63.55 a barrel due to the addition of 26 cents or 0.41 per cent.
Iran and the US held negotiations in Muscat, the capital of Oman, on Friday to overcome sharp differences over Iran’s nuclear programme.
It was reported that the talks had ended with Iran’s foreign minister saying negotiators will return to their capitals for consultations and the talks will continue.
Regardless, the meeting kept investors anxious about geopolitical risk, as Iran wanted to stick to nuclear issues while the US wanted to discuss Iran’s ballistic missiles and support for armed groups in the region.
Any escalation of tension between the two nations could disrupt oil flows, since about a fifth of the world’s total consumption passes through the Strait of Hormuz between Oman and Iran.
Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, as does Iran, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).
According to Reuters, Iran objected to the presence of any US Central Command (CENTCOM) or other regional military officials, saying that would jeopardise the process.
The current confrontation was sparked by more than two weeks of unrest in Iran that saw authorities launch a deadly crackdown that killed thousands of civilians and shocked the world. As reports of the deaths trickled out of Iran, US President Donald Trump threatened to strike Iran if any of the tens of thousands of protesters arrested were executed.
Meanwhile, Kazakhstan’s planned oil exports could fall by as much as 35 per cent this month via its main route through Russia, as the country’s top oil company, Tengiz oilfield, slowly recovers from fires at power facilities in January.
ING analysts have pointed out Iran’s neighbour, Iraq, and a disagreement with the US as another bullish factor for oil prices. It seems Iraqi politicians favour Mr Nouri al-Maliki as the country’s next Prime Minister, but the US thinks Mr al-Maliki is too close to Iran. President Trump has already threatened the oil producer with consequences if he emerges as PM.
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