Economy
SEC Targets Trillions of Naira from Non-Interest Capital Market
By Aduragbemi Omiyale
The Securities and Exchange Commission (SEC) has said it plans to enhance the non-interest capital market because of its capability to boost liquidity in the financial markets by trillions of Naira.
The Director-General of SEC, Mr Lamido Yuguda, while speaking with the executives of the Non-Interest Financial Institutions Association of Nigeria (NIFIAN) in Abuja over the weekend, said the market segment was given attention in the 10-year Capital Market Master Plan.
According to him, in the next three years, the plan is to ensure that 25 per cent of the total value of the Nigerian capital market is from the non-interest sector.
“We are talking of trillions, which means that we are not scratching the surface right now. Both the market and the commission need to do more. We are working on ensuring that we have a framework that looks at issues relating to the non-interest capital market and ensures we tackle them.
“There are many opportunities in the market right now for non-interest products. The biggest players right now are the pension fund. PenCom is interested that whatever product is there have some basic risk management features in them, but I think there is a lot that we can do.
“You talk about the Sukuk market and the move towards complexities, I would say that even the simple Sukuk, we have not had enough of it.
“When we came in 2020, it was only the sovereign Sukuk and the subnational Sukuk from Osun State. We have tried to attract interest to the product by doing many seminars and rejoining IFSB fully. We also tried to encourage private issuers and show the potential of the Sukuk to other players in the market. This is a simple product but a very powerful one,” he said.
Mr Yuguda stated that Nigeria needs to adopt the normal Sukuk forms where money is raised via Sukuk, assets are built and then cash flows are generated from the assets which then flow back to the Sukuk holders.
“That’s the traditional way, which happened in countries like Malaysia. Malaysia has a lot of hotels and resorts, and the key financing tool they have used is the Sukuk. They understand the power of this Sukuk instrument. It’s a collateralised form of lending; the asset is built and belongs to the people who have contributed money.
“You can see the cash flows coming back. These hotels are increasing in output in the economy in which it is located. People are working, earning more income. The investors are happy because they are receiving the cash flows, and the country is getting more prosperous as people from other parts of the world go there to have a good life,” the SEC chief stated.
The DG emphasised the need for all stakeholders to create more awareness, as there is a lot of ignorance and misconceptions among others about Sukuk, and they all need to be addressed.
“A lot of countries have made tremendous progress which I think we can learn from. Once people see it and it works, we will get many interested in the sector.
“The commission is ready to commit human and material resources to ensure that the market grows to the level we want. We are interested in the market’s growth as that will positively affect the country’s economy,” Mr Yuguda stated.
He disclosed that the agency has just exposed the rules for Shariah advisors in its drive to grow this market segment, noting that Shariah governance is crucial, considering that compliance with Shariah rules and principles is important in non-interest capital market operations/transactions.
“The market is developing fast, and there is a need for the proper regulation of those that will drive the process. The provision of the rules is in line with local and international best practices. The regulatory organization in the Nigerian Financial System, such as CBN and NAICOM, had issued such guidelines to provide clear and good Shariah governance in their respective sectors.
“Making the Shariah Advisory service a registrable function in the market will assist in effective implementation of the proposed consolidation of the Shariah governance rules and will also be an additional source of revenue to the Commission,” the commission stated.
Speaking earlier, The President of NIFIAN, Mr Hassan Usman, urged SEC to provide a framework for non-interest finance to avoid operators’ misuse of the platform.
Mr Usman stated that Nigerians need more awareness of the non-interest capital market. He stated that the association is interested in programmes that will increase the enlightenment of the product and boost its contributions to market capitalisation.
By Adedapo Adesanya
Central Securities Clearing System (CSCS) Plc bested three price decliners to lift the NASD Over-the-Counter (OTC) Securities Exchange by 0.05 per cent on Thursday, July 16.
The securities depository company gained N2.29 during the trading day to close at N92.64 per share compared with the previous day’s price of N90.35 per share.
As a result, the market capitalisation of the bourse grew by N1.42 billion to N2.592 trillion from N2.590 trillion, while the NASD Security Index (NSI) improved by 2.36 points to 4,318.87 points from 4,316.51 points.
The three price losers yesterday were led by 11 Plc, which shed N10.00 to end at N240.00 per unit versus Wednesday’s closing value of N250.00 per unit, FrieslandCampina Wamco Nigeria Plc lost N2.34 to finish at N147.66 per share compared with the N150.00 per share it closed at midweek, and Food Concepts Plc depleted by 7 Kobo to settle at N2.42 per unit, in contrast to the preceding day’s N2.49 per unit.
A look at the activity chart showed that during the session, the value of transactions soared by 43.3 per cent to N104.1 million from the preceding session’s N65.2 million, and the number of deals jumped by 39.3 per cent to 39 deals from the 28 deals completed a day earlier, while the volume of trades contracted by 75.7 per cent to 1.2 million units from 4.8 million units.
When trading activities ended for the day, Great Nigeria Insurance (GNI) Plc led the activity chart as the most active 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 74.9 million units exchanged for N5.3 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth 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 transacted for N415.7 million.
By Adedapo Adesanya
The Naira further appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, July 16, by 65 Kobo or 0.04 per cent to sell for N1,381.53/$1, in contrast to Wednesday’s closing value of N1,382.18/$1.
This was buoyed by improved FX liquidity to absorb the high demand for Dollars during the trading session.
However, the local currency depreciated against the Pound Sterling in the official market yesterday by N9.48 to close at N1,866.17/£1 versus the preceding day’s N1,856.69/£1, and lost N2.99 against the Euro to quote at N1,582.68/€1 compared with the midweek rate of N1,576.69/€1.
At the parallel market, the Nigerian currency maintained stability against its United States counterpart at N1,405/$1, and at the GTBank FX desk, it remained unchanged at N1,389/$1.
On Thursday, data from the Central Bank of Nigeria (CBN) showed a surge in interbank FX turnover and deal count. Interbank FX activities at the NFEM window increased sharply by 69 per cent to $205.366 million from $121.727 million reported the previous day.
Nigeria’s gross external reserves continue to rise, supported by steady foreign exchange inflows from hydrocarbon receipts, remittances and foreign portfolio investments, boosting market confidence. It settled at $51.893 billion from $51.867 billion the previous day.
The apex bank has also launched a new digital platform that will track every foreign exchange transaction involving Bureau De Change (BDC) operators, marking a major step in its efforts to improve transparency and strengthen oversight of Nigeria’s retail forex market.
In an operational guidance issued on July 15 to authorised dealer banks and licensed BDCs, the CBN introduced the FX BDC Purchase Tracker (FXBT), a centralised electronic portal that will monitor foreign exchange purchases by BDCs from the point of request through approval, settlement and eventual sale.
As for the crypto market, prices were down as the markets weighed fresh US airstrikes on Iran that boosted risk sentiment, with Ethereum (ETH) down by 4.7 per cent to $1,829.37.
Solana (SOL) decreased by 3.6 per cent to $77.49, Dogecoin (DOGE) depreciated by 3.1 per cent to $0.0718, Cardano (ADA) also crashed by 3.1 per cent to $0.1588, Bitcoin (BTC) slumped by 2.9 per cent to $62,820.21, Ripple (XRP) dipped by 2.6 per cent to $1.08, Binance Coin (BNB) fell by 2.3 per cent to $569.02, and TRON (TRX) shrank by 0.8 per cent to $0.3219, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Aduragbemi Omiyale
In a bid to help investors recover about N270 billion in unclaimed dividends in the capital market, a nationwide enlightenment campaign has been launched by the Securities and Exchange Commission (SEC).
This initiative involves town hall meetings that would go around the country to sensitise Nigerians on the need to claim these fallow funds.
The Director General of SEC, Mr Emomotimi Agama, speaking at a town hall meeting in Lagos, said the regulator is not happy that investors, who worked hard to purchase shares in the stock market, have not claimed their profits for many years, making unclaimed dividends pile up.
“The commission considers this situation unacceptable. Funds belonging to investors should ultimately find their way back to their rightful owners,” the SEC chief, represented at the event by the Director of Registration and Exchanges, Market Infrastructure Department, Ms Hafsat Rufai, stated.
He said during this campaign Nigerians would be informed of the unclaimed monies, the role of the National Investor Protection Fund (NIPF), and the procedures for verifying and recovering legitimate claims, stressing that SEC is committed to ensuring that investors’ funds are returned to their rightful owners.
The DG stated that unclaimed monies administered by the NIPF include return funds from public offers, scheme consideration arising from mergers, acquisitions and corporate restructuring transactions, as well as other capital market-related funds that have remained dormant.
He disclosed that the town hall meetings would be held in the six geopolitical zones and the Federal Capital Territory.
In addition, electronic and social media platforms would be used to broaden public awareness on this issue, with efforts to be made to address the transmission of securities following the death of an investor, noting that many families were either unaware that their deceased relatives owned shares or lacked knowledge of the legal and administrative procedures required to transfer such investments to rightful beneficiaries.
“As a result, valuable investments and returns on investments sometimes remain inaccessible for many years, thereby denying beneficiaries the financial benefits intended for them,” he said, urging investors to maintain proper records of their investments and encouraging families to take proactive steps to preserve inherited wealth.
