Economy
NASD to Launch Investor Protection Fund, Strengthen Trading in H2 2021
By Ashemiriogwa Emmanuel
Following a very impressive first-half performance, the NASD Over-the-Counter (OTC) Securities Exchange is set for an active second half of 2021.
In this half of the year, there are plans to commence the NASD Investor Protection Fund (IPF), among other implementations to further strengthen the unlisted securities bourse.
The Managing Director and Chief Executive Officer (CEO) of NASD, Mr Bola Ajomale, while speaking at a webinar held last Friday, which was monitored by Business Post, stated that the IPF scheme is to compensate investors with genuine claims of pecuniary loss resulting from insolvency, bankruptcy or negligence of a capital market operator.
In addition, he said there are also plans to implement the Financial Information Exchange (FIX) Protocol which will be used to disseminate price and trade information among investment banks and broker-dealers.
He added that there will be the implementation of a tight-coupling to Central Securities Depository (CSD) in the second half of the year which provides securities accounts, central safekeeping services and asset services in helping to ensure the integrity of securities issues.
“We believe these plans will come into fruition in the second half of 2021. We are trying to get market investors into different asset classes to allow investors to participate in the market through buying into funds and several asset classes.
“With ETFs, you are allowed to buy into asset classes that allow you to hedge against risks. We are going to work according to guidelines issued by the SEC on the process of tokenization. When we are set, we will run a web shot of it and be sure,” he stated.
According to him, there are moves to launch a mobile application by the end of the third quarter.
“We are working on making it standardised; engage all operators or participating institutions in the market and then run a test to get feedback,” he said.
Speaking on strategies for the NASD to attract more foreign investors, the NASD helmsman said, “The OTC market we operate is one where we see foreign investors come in for the long term stocks and take a short position in a short period and sometimes, they come in a position (long or short) in a particular stock and exit the stock or market leaving Nigerians to buy the awkward end of that stock. So, the OTC market is one for short term positions on stocks.”
He also said the bourse plans to regulate crowdfunded projects to open its crowdfunding portal, VentureRamp, for donor-based crowdfunding which facilitates capital raise for enterprises seeking to fund projects of varying sizes, expansion, new product development, and so on.
Mr Ajomale noted that the exchange will open its dealer category for applicants who want to register with NASD as dealers on the OTC Market while onboarding was set to commence soon.
NASD OTC Securities Q2 Market Performance Breakdown
Meanwhile, NASD recorded a positive market performance at the close of the second quarter of 2021 compared to the previous quarter as its market capitalisation increased by 22.9 per cent to N652.5 billion from the N531 billion recorded in the first quarter of the year.
Similarly, NASD Security Index (NSI) also rose by 1.1 per cent to 754.9 index points from the 747.01 recorded at the end of the first three months of 2021.
Trading activity in the period under review showed that the total value on the market jumped to N7.8 billion from the N1.4 billion, a 457 per cent increase, while the volume also skyrocketed by 936.6 per cent from 41 million units to 425 million units.
This happened as three new companies joined the market in the period under review; the Nigerian Exchange Group Plc, 11 Plc and Capital Bancorp Plc.
This equally led to a rise in the number of deals recorded at the bourse for the quarter under review as investors executed a total of 2,292 deals, 512.8 per cent higher than the 374 recorded in Q1 2021.
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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