Economy
NASD Exchange Moves to Stop Market Manipulation by Stockbrokers
By Adedapo Adesanya
As parts of its effort in maintaining fairness and reliability in the Nigerian capital market, the NASD Over-the-Counter (OTC) Securities Exchange has developed and unveiled its surveillance and compliance priorities for the year 2020.
In a circular obtained by Business Post, the exchange called on its registered Participating Institutions (PIs), who are also known as stockbrokers, to operate a separate settlement bank account for their transaction income different from the trading income generated through trade on other securities exchanges.
The stockbrokers were also directed to open the bank account under the NASD Trading Income Account and should be used solely for trading activities on its (NASD) platform.
“NASD shall periodically review the bank statements of Participating Institutions to ensure compliance with this requirement,” the circular issued on Friday, January 3, 2020, stated.
The exchange also ordered that Settlement Accounts should be funded appropriately before execution of transactions in order to protect market integrity and enhance transparency, adding that it will conduct a periodical review to ensure compliance.
On market manipulation, the bourse for unlisted stocks in Nigeria said it would strengthen its supervisory oversight on brokerage firms to detect and prevent market manipulation and promote a transparent, free and orderly market.
NASD Exchange further urged stockbrokers to develop their trading management systems which includes identifying transactions that are likely to constitute unfair trading, conducting trading surveillance based on the results of such identification, taking appropriate measures against inappropriate transactions and responding in good faith to inquiries or complaints on unfair trading.
In order to stop illicit funds into the market space, the exchange said all PIs must obtain full information on clients’ businesses and sources of income in order to ascertain the financial worth of clients and mitigate money laundering through the client’s information via valid means of identification such as International passport and National Identity card.
In addition, they were also required to immediately notify NASD of any changes in their corporate and business structure and operations.
Following the release of new regulations regarding insurance policies of capital market operators, NASD said that it will focus on each stockbroker’s compliance with the minimum capital requirements for business operations as set by the Securities and Exchange Commission (SEC) as regards appropriate computation of annual insurance policies.
The exchange said that it has put in place mechanisms for the early detection of the potential failure of any Firm and mitigation of client losses, noting that protection of clients assets was essential to it.
To further boost market integrity, NASD assured that it would work closely with SEC, the Central Securities Clearing System (CSCS), and other stakeholders to strengthen its data collection system in respect of brokerage companies.
By Adedapo Adesanya
The duo of FrieslandCampina Wamco Nigeria Plc and Central Securities Clearing System (CSCS) Plc pulled down the NASD Over-the-Counter (OTC) Securities Exchange by 0.89 per cent on Monday, August 17.
The price of FrieslandCampina went down by N9.85 to N160.00 per unit from N169.85 per unit, and CSCS Plc depreciated by 96 Kobo to N98.50 per share versus N99.46 per share.
As a result, the market capitalisation further lost N23.90 billion to end at N2.656 trillion, in contrast to the preceding session’s N2.68 trillion, and the NASD Security Index (NSI) dropped 39.81 points to close at 4,426.02 points from 4,465.83 points.
During the trading session, the share price of Industrial and General Insurance (IGI) Plc was up by 1 Kobo to 55 Kobo per unit from 54 Kobo per unit.
Yesterday, the volume of securities transacted by market participants decreased by 79.3 per cent to 652,081 units from 3.2 million units, the value of securities slid by 78.2 per cent to N10.7 million from N375.7 million, and the number of deals went south by 54.4 per cent to 21 deals from 46 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 79.6 million units transacted for N5.8 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, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
By Dipo Olowookere
The bears have refused to vacate the Nigerian Exchange (NGX) Limited, further inflicting a 0.07 per cent loss on the bourse on Monday due to sustained profit-taking.
Data from Customs Street indicated that sell-offs were more pronounced in the financial services sector during the session, with the insurance index down by 1.48 per cent, and the banking counter shedding 0.46 per cent.
They rubbed out the gains recorded by the other sectors, as the consumer goods segment rose by 0.43 per cent and the energy index gained 0.01 per cent, while the industrial goods space closed flat.
When the closing gong was struck to signify the close of transactions, the All-Share Index (ASI) shrank by 164.55 points to 242,454.65 points from 242,619.20 points, and the market capitalisation decreased by N106 billion to N156.518 trillion from the preceding session’s N156.624 trillion.
Investor sentiment remained bearish yesterday, as the stock market ended with 19 price gainers and 36 price losers, implying a negative market breadth index.
RT Briscoe lost 9.91 per cent to finish at N10.45, Fortis Global Insurance slumped by 9.89 per cent to N2.37, McNichols depreciated by 9.62 per cent to N4.70, University Press dropped 9.35 per cent to close at N4.85, and NEM Insurance dipped by 8.83 per cent to N30.45.
Conversely, Trans-Nationwide Express gained 9.86 per cent to trade at N3.12, AVA Capital expanded by 9.72 per cent to N7.90, Thomas Wyatt went up by 9.09 per cent to N3.00, Legend Internet improved by 8.75 per cent to N4.35, and Dangote Sugar soared by 8.60 per cent to N70.10.
On the activity chart, the trading volume retreated by 7.14 per cent to 1.3 billion units from 1.4 billion units last Friday. The trading value went down by 49.45 per cent to N22.9 billion from N45.3 billion, while the number of deals surged by 16.25 per cent to 45,494 deals from 39,134 deals.
At the close of trades, Lasaco Assurance transacted 730.7 million shares worth N1.3 billion, Consolidated Hallmark traded 154.3 million equities for N1.1 billion, Cornerstone Insurance exchanged 106.1 million stocks valued at N535.4 million, Chams sold 25.3 million shares worth N108.4 million, and First Holdco transacted 25.0 million equities for N3.4 billion.
By Adedapo Adesanya
The Naira appreciated against the United States Dollar by N8.07 or 0.59 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, August 17, to N1,349.54/$1 from last Friday’s N1,357.61/$1.
Similarly, the Nigerian Naira gained N9.99 against the Pound Sterling in the official FX market during the session to settle at N1,830.11/£1 versus the previous day’s N1,840.10/£1, and improved its value against the Euro by N6.91 to close at N1,564.79/€1 compared with the preceding session’s N1,571.70/€1.
However, the Nigerian currency traded flat against the US Dollar yesterday at the parallel market at N1,395/$1, and at the GTBank forex counter, it remained unchanged at N1,364/$1.
Interbank FX turnover, according to data from the Central Bank of Nigeria (CBN), accelerated by 265 per cent to $437.529 million from last Friday’s $119.594 million, with the number of deals rising to 178 from 137.
Total FX inflows into the NAFEM window increased significantly to $1.77 billion from $0.83 billion in the previous week, according to the research subsidiary of Coronation Group.
Domestic sources accounted for 63.44 per cent of total inflows, driven primarily by Exporters (31.2 per cent) and Non-Bank Corporates (17.7 per cent), underscoring the growing contribution of autonomous market participants to FX supply.
Notably, the central bank injected $252.1 million, representing 14.3 per cent of total inflows, to enhance market liquidity. On the external side, Foreign Portfolio Investors (FPIs) remained the largest single source of FX, contributing 33.71 per cent of aggregate inflows.
Meanwhile, the cryptocurrency market was mixed on Monday, with Bitcoin (BTC) up by 0.9 per cent to $64,153.93, and Solana (SOL) gaining 0.3 per cent to sell at $75.602.
This occurred amid broader markets continuing their climb following President Donald Trump saying he was not interested in extending the expiring agreement with Iran, and as fighting flared again in Lebanon.
But Cardano (ADA) lost 2.2 per cent to finish at $0.1729, Ripple (XRP) declined by 0.8 per cent to $0.9939, Dogecoin (DOGE) slipped by 0.7 per cent to $0.0698, Binance Coin (BNB) crumbled by 0.4 per cent to $602.80, Ethereum (ETH) slid by 0.3 per cent to $1,892.96, and TRON (TRX) also depreciated by 0.3 per cent to $0.3314, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00, respectively.
