Economy
It’s Illegal for Fund Managers to Hold Clients’ Funds, Securities—SEC
By Aduragbemi Omiyale
Fund managers have been warned against holding clients’ funds and securities as this act is illegal and in violation of the Consolidated Rule 95 (1-2) of the Securities and Exchange Commission (SEC).
The Director-General of SEC, Mr Lamido Yuguda, while addressing reporters after the last Capital Market Committee (CMC) meeting of the year, said any fund manager found doing this would be made to face the full wrath of the apex regulator in the Nigerian capital market.
At the meeting held in Lagos over the weekend, he reminded fund managers that all funds and securities of clients being managed by their firms must be vested with the custodians.
He also drew their attention to issues that arose from the commission’s recently concluded inspection of fund/portfolio management operations whereby several fund managers managing discretionary and non-discretionary products and portfolios were yet to seek a No Objection of their products and portfolios from the agency, which is a violation of its rules.
The SEC DG disclosed that the meeting also emphasized the increasing importance of fintech, sustainable finance, financial inclusion and non-interest finance, adding that the executive management team of the SEC reiterated its commitment to continue creating awareness, imparting knowledge and engendering public participation in these topical areas.
Speaking further on the outcome of the meeting, Mr Yuguda said, “The market community was reminded of the annual renewal of registration of Capital Market Operators, which is aimed at ensuring that only fit and proper persons operate in the Nigerian capital market. The portal for renewal of registration for the year 2023 will open on January 1, 2023, and close on January 31, 2023.
“Members received updates from the Commodities Ecosystem Implementation Committee that significant efforts were being made on transitioning the commodities market from spot-based operations to trading in commodity derivatives;
“Furthermore, the Commodities Ecosystem Implementation Committee informed members that it held engagements with the Federal Ministry of Agriculture and Rural Development (FMARD), Standards Organization of Nigeria (SON), Nigeria Export Promotion Council (NEPC), on the issue of traceability of commodities, which is considered a key building block for Nigerian export promotion.”
Mr Yuguda announced that the e-dividend committee notified members of efforts to rebuild the e-Dividend Management Mandate System (e-DMMS) platform.
This, he said, involves having a centralized submission of E-dividend mandate forms, an Application Programming Interface (API) for Banks and Registrars, and a revamped web interface, among others.
He expressed appreciation over the recent intervention of the House of Representatives Committee on Capital Markets and Institutions on unclaimed dividends, saying, “the committee is investigating the rising value of unclaimed dividends and unremitted withholding tax on dividends.
“The commission is ready to provide all the necessary support to the committee to enable it to carry out its assignment,” he stated.
“Members of the CMC were reminded to collectively work towards the enactment of the Investments and Securities Bill 2022, which will enhance the performance of the Nigerian Capital Market and align it with global best practices. The Bill seeks to improve the legal and regulatory framework that will accommodate the dynamics of the Market.
“The meeting emphasized the increasing importance of Fintech, Sustainable Finance, Financial Inclusion and Non-Interest Finance. The Executive Management team of the SEC reiterated its commitment to continue creating awareness, imparting knowledge and engendering public participation in these topical areas.
“The Financial Literacy Technical Committee informed members that it made substantial progress on introducing capital market studies (CMS) to secondary and tertiary institutions. It made appealed to the CMC to support its activities financially,” he added.
The DG added that Capital Market Operators were informed of the approval granted by the Honourable Minister of Finance, Budget and National Planning on Non-Interest Finance (taxation) regulation, which has already been gazetted.
“This has important implications for the market towards encouraging new issuances of Non-Interest Capital Market products and services. It is expected that Issuers and Market Operators will take advantage of this by creating more non-interest finance products,” he further said.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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