Economy
Investor Negligence Blamed for N10b Capital Market Fraud
Some capital market stakeholders have cited negligence and greed on the part of investors in the share scam involving Partnership Securities Limited (PSL).
The Chief Executive Officer of PSL, Mr Victor Ogiemwonyi is currently in the custody of Economic and Financial Crime Commission (EFCC) and facing criminal and civil charges for misappropriating money of some of his clients. Particularly, the broker, a former Council member of the NSE, was said to have sold shares of former Chief Executive Officer of Ecobank Transnational Incorporated (ETI), Mr Arnold Ekpe, worth N1.24 billion and misappropriated the proceeds.
He was also said to have introduced a product called Partnership Securities Deposit Account (PSDA), which involved investors keeping their securities with the company for a return annually. While the investors are battling to get back their money, market operators said they wondered how an investor would receive 80 trade alerts on the sale of his shares, he did not get the proceeds of the shares and yet waited for three months before raising the alarm.
“Why did an investor receive 80 alerts that his shares are being sold and refused to act – report to Nigerian Stock Exchange (NSE), Securities and Exchange Commission (SEC) or EFCC. This is either pure negligence or there is something that we do not know,” a market operator said.
Meanwhile, market regulators and operators have expressed optimism that the risk based supervision(RBS) framework and the framework to identify systemic non-bank financial institutions (NBFI) recently introduced by the SEC will help to check the activities of operators who use holding company structure to perpetuate infractions in the market.
While the SEC and NSE register and licensed capital market operators (CMO) to play in the market, some of the CMOs float subsidiaries that operate outside the purview of SEC and NSE. In the process of operating outside the supervision of the regulators, some of those CMOs have committed market infractions. BGL Group and Partnership Securities Limited are typical examples. Both organisations used subsidiaries not regulated by SEC and NSE to market financial products and services that led to losses by investors.
This development has given a lot of concerns to investors who said it was discouraging for them to patronise the capital market through CMOs and do not get enough protection.
However, officials of SEC and NSE, who spoke to THISDAY on the condition of anonymity, said the introduction of RBS and framework for NBFI would address that challenge and give investors adequate protection going forward.
SEC had adopting RBS will not only ensures that regulated entities are well positioned to accommodate the risks that they bear, but more importantly absorb risks that may crystallise from adverse events.
The commission said the systemically important CMOs would be subjected to higher capital requirements that are commensurate to their size, scale of activity and inherent risk. Besides, it shall on a quarterly basis review the capital adequacy status of the identified CMOs with a view to ensuring that the capital requirements are within the regulated level.
“Identified CMOs shall be required to enrol for Legal Entity Identifiers (LEI) system at the Central Securities Clearing System (CSCS). LEIs are unique identification associated with a single legal entity, which allows for consistent identification of parties to financial transactions, facilitating a consistent and integrated view of exposures. LEIs are essential for effective risk management for financial companies, especially for assessing their connections and exposures to other firms and regulatory oversight. The LEI can help the financial industry, regulators, and policymakers trace exposures and connections across the financial system,” it said.
By Dipo Olowookere
Renewed buying interest raised the Nigerian Exchange (NGX) Limited by 0.33 per cent on Monday, with gains recorded in almost all the major sectors of the bourse at the close of transactions.
According to data harvested by Business Post, the insurance counter expanded by 0.62 per cent, the banking index grew by 0.59 per cent, the energy sector appreciated by 0.40 per cent, and the consumer goods space improved by 0.10 per cent, while the industrial goods segment closed flat.
When the closing gong was struck by 4 pm to signify the close of business on Customs Street, the All-Share Index (ASI) was up by 1,113.76 points to 243,707.07 points from 242,593.31 points, and the market capitalisation chalked up N714 billion to close at N156.308 trillion compared with the previous session’s N155.594 trillion.
Interest in Nigerian stocks yesterday resulted in a rise in the activity level, with the trading volume soaring by 17.86 per cent to 717.2 million units from 608.5 million units. The trading value advanced by 77.19 per cent to N56.7 billion from N32.0 billion, and the number of deals surged by 36.22 per cent to 73,321 deals from 53,826 deals.
FCMB was the busiest stock during the trading day, with a turnover of 152.3 million units worth N1.8 billion, Premier Paints exchanged 61.0 million units valued at N135.3 million, Dangote Cement traded 34.7 million units for N29.7 billion, The Initiates sold 32.8 million units worth N1.0 billion, and Jaiz Bank transacted 32.6 million units valued at N293.3 million.
Yesterday, the market breadth index was positive after the exchange closed with 37 price gainers and 28 price losers, representing strong investor sentiment.
International Energy Insurance gained 9.92 per cent to settle at N7.98, the Initiates added 9.91 per cent to its share price to quote at N32.15, ABC Transport garnered 9.68 per cent to trade at N6.80, Abbey Mortgage Bank grew by 9.63 per cent to close at N10.25, and Linkage Assurance soared by 9.36 per cent to N1.87.
On the flip side, Fidson Healthcare gave up 10.00 per cent to finish at N122.85, Academy Press crashed by 9.70 per cent to N7.45, RT Briscoe depreciated by 9.43 per cent to N13.45, SUNU Assurances tumbled by 9.37 per cent to N4.06, and Learn Africa decreased by 8.70 per cent to N10.50.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a marginal 0.05 per cent drop on Monday, June 8, depleting the market capitalisation by N1.27 billion to N2.606 trillion from N2.607 trillion, and cutting the Unlisted Security Index (NSI) by 2.12 points to 4,356.20 points from the previous 4,358.32 points.
The contraction witnessed during the session was triggered by a price loser, which overpowered that gains recorded by two securities on the trading platform.
Data indicated that MRS Oil Plc lost N6 at the close of business to settle at N165.00 per share compared with last Friday’s price of N171.00 per share.
Conversely, Lighthouse Financial Services Plc added 9 Kobo to sell at N1.03 per unit versus 94 Kobo per unit, and Central Securities Clearing System (CSCS) Plc appreciated by 8 Kobo to N78.48 per share from N78.40 per share.
The volume of securities traded by investors yesterday soared by 51.9 per cent to 213,188 units from 140,345 units, and the value of securities increased by 12.6 per cent to N20.2 million from N17.9 million, while the number of deals executed fell by 7.4 per cent to 25 deals from 27 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 64.8 million units exchanged for N4.4 billion.
GNI Plc also remained as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Adedapo Adesanya
The Naira opened the new trading week on a negative note on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEX) and the black market.
At the parallel market, the Nigerian currency weakened against the US Dollar by N5 to sell for N1,380/$1 compared with the preceding session’s rate of N1,375/$1, and at the GTBank FX desk, it shed N1 to trade at N1,373/$1 versus N1,372/$1.
At the official market, it lost 63 Kobo or 0.05 per cent against the Dollar during the session to close at N1,362.84/$1, in contrast to last Friday’s value of N1,362.21/$1.
However, the Nigerian Naira gained N2.30 against the Pound Sterling at the spot market yesterday, quoting at N1,821.29/£1 compared with the previous rate of N1,823.59/£1, and improved against the Euro by 23 Kobo to settle at N1,574.35/€1 versus N1,574.58/€1.
Data from the Central Bank of Nigeria (CBN) showed that interbank forex turnover increased to $92.248 million across 90 deals, from $73.565 million last Friday.
On the policy front, participants believed that the application of the fourth edition of the Foreign Exchange Manual of the central bank, which introduces updated guidelines for foreign exchange transactions and tightening compliance requirements for authorised dealers and market participants, will enhance market flexibility and ease previous restrictions.
Meanwhile, the cryptocurrency market snapped from recent declines, jolted by Strategy’s purchase of 1,550 Bitcoin for approximately $101 million, increasing its total holdings to 845,256 BTC. The company raised $181 million through common stock sales, using the proceeds to fund the bitcoin purchase and increase its cash reserves to $1 billion, pushing the price of the coin higher by 3.2 per cent to $63,731.69.
Cardano (ADA) appreciated by 8.4 per cent to $0.1738, Ethereum (ETH) rose by 5.2 per cent to $1,711.54, Solana (SOL) expanded by 5.1 per cent to $67.82, and Ripple (XRP) improved by 4.9 per cent to $1.18.
Further, Dogecoin (DOGE) jumped by 4.3 per cent to $0.0873, Binance Coin (BNB) soared by 2.7 per cent to $609.50, and TRON (TRX) increased by 0.7 per cent to $0.3274, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $0.9997 and $0.9998, respectively.
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