UBA, MTN, 10 Others ‘Loan’ Investors 27 million Stocks
By Dipo Olowookere
Investors in the Nigerian stock market have at least 27.1 million shares available to borrow if they are interested and meet the criteria.
A total of 12 companies on the Nigerian Stock Exchange (NSE) have offered some of their equities for such purpose.
According to the NSE, the firms pledged a total volume of 27,101,500 units of their securities for lending as at Friday, April 17, 2020.
These organisations are MTN Nigeria, Nigerian Breweries, Presco, UBA, Union Bank, Zenith Bank, Okomu Oil, GTBank, Dangote Cement, Dangote Sugar, Flour Mills and CAP.
An analysis by Business Post showed that GTBank offered the highest volume of shares for lending to investors, followed by Presco, UBA, MTN Nigeria and Okomu Oil.
MTN Nigeria pledged 2,547,000 units of its stocks for lending. Nigerian Breweries offered 318,000 units, Presco pledged 4,015,000, UBA offered 2,600,000 units, Union Bank offered 450,000 units, while Zenith Bank pledged 1,661,500 units.
In addition, Okomu Oil offered to lend 2,190,000 stocks, GTBank pledged 8,580,000 shares, Dangote Cement pledged 1,740,000 equities, Dangote Sugar promised 2,350,000 stocks, Flour Mills offered 600,000 shares, while CAP promised 50,000 stocks.
In 2019, a total of 61,435 shares worth N344,555 were lent to market participants and in the four months of 2020, a total of 4,138,000 units of stocks valued at N34.8 million have been lent to investors.
Securities lending involves the transfer of shares to a borrower from the owner for a period of time and for a fee.
At the expiration of the loan period, the stocks are returned to the lender and the collateral given to the borrower. This transaction is done through accredited Securities Lending Agents.