Economy
Unclaimed Dividends: SEC Engages Registrars, Stockbrokers, Others
By Dipo Olowookere
The stubborn demon in the Nigerian capital market, unclaimed dividends, may soon become a thing of the past if the latest move by the Securities and Exchange Commission (SEC) yields meaningful results.
The Director-General of the agency, Mr Lamido Yuguda, said to tackle the issue, key stakeholders in the market were engaged and it was discovered that one of the major reasons for the rising cases was identity management.
While addressing the House of Representatives Committee on Capital Markets and Institutions in Abuja, Tuesday, the DG said the commission has concluded plans to resolve issues of identity management to eliminate unclaimed dividends in the capital market as well as other issues.
At the presentation of the 2022 budget of the commission to the lawmakers, Mr Yuguda said an identity management committee has been established to harmonise various databases of investors and facilitate data accuracy in the market.
According to him, the committee comprises the SEC, the registrars, the stockbrokers, the issuing houses, the Central Securities Clearing System (CSCS), and the Nigerian Exchange (NGX) Limited, in addition to the e-dividend management committee.
He said the committee’s assignment would address the challenges of identity management and help tackle some of the issues of unclaimed dividends, direct cash settlement and multiple subscriptions.
“We have engaged with the industry to see where the issues are. We have understood the problem better and we are working in collaboration with them to ensure that by the end of the first half of 2022 we will be able to report back to this committee some of the milestones achieved in solving some of these issues and we believe it will have a massive impact,” he stated.
The SEC boss disclosed that the commission was also working to combat challenges confronting the commission on Information Technology.
“We need to transform our IT infrastructure as we superintendent over a market that is vast and technology-driven. The Steering committee has started work and we are already looking at the proposals,” the SEC chief disclosed.
Mr Yuguda said the SEC has been collaborating with the Standards Organisation of Nigeria (SON) to develop standards for commodities and the commission has already held two workshops in Lagos and Kano, expressing the hope that it will make the nation’s agricultural commodities acceptable to the world over as well as create wealth for the country.
The DG also disclosed that the agency recently approved the first electronic offer in the capital market for MTN.
According to him, “Before now, we had rules on electronic offers which we developed but they are only being used now with the MTN offer. These are some of the achievements the Commission has been able to record recently.”
On funding, the SEC boss stated that the commission does not rely on the federal government for funding as it is self-funding adding that the downturn in the capital market due to the ongoing pandemic has adversely affected the revenue of the agency.
He said “The budget of 2021 has been a huge departure from the past as we have worked on new sources of income and reduced our expenditures. With these efforts, we know that we will have a commission that everyone will be proud of.”
The DG commended the Chairman and the committee members for their unwavering support to the commission and the capital market.
In his remarks, the Chairman of the Committee, Mr Babangida Ibrahim, commended the organisation on its efforts so far and assured that the committee would continue to provide support where necessary to ensure that the nation has a vibrant capital market.
“It is our responsibility to oversight the SEC and that is why we invited them here today to brief us on the performance of their 2021 budget, including the success and challenges they have faced in the year under review. We will continue to engage with the commission to attain the progress we desire for our capital market,” he stated.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.16 per cent decline on Tuesday, January 21, extending its loss this week to two.
This further depleted the market capitalisation of the alternative stock exchange by N1.65 billion at the close of transactions to N1.071 trillion from the N1.073 trillion it closed in the preceding session.
In the same vein, the NASD Unlisted Security Index (NSI) slid by 4.79 points to wrap the session at 3,100.33 points compared with 3,105.12 points recorded in the previous session.
The bourse ended with two price losers yesterday led by Geo Fluids Plc, which gave up 32 Kobo to trade at N4.38 per share versus Monday’s closing price of N4.70 per share and FrieslandCampina Wamco Nigeria Plc, which depreciated by 15 Kobo to close at N39.50 per unit compared with the previous day’s N39.65 per unit.
On the second trading day of the week, the number of deal carried out slightly went up by 8.3 per cent to 13 deals from the 12 deals executed at the previous trading session.
Also, the value of transactions increased by 97.2 per cent to N4.5 million from the N2.5 million recorded a day earlier, while the volume of securities traded in the session declined by 71.6 per cent to 183,780 units from the 767,610 units recorded on Monday.
FrieslandCampina Wamco Nigeria Plc remained the most traded equity by value (year-to-date) with 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with 9.1 million units valued at N44.0 million, and 11 Plc with 55,358 sold for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume (year-to-date) with 25.3 million units worth N5.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units valued at N162.9 million.
By Adedapo Adesanya
Pressure further mounted on the Nigerian Naira in the different segments of the foreign exchange market on Tuesday, making its value to shrink against the United States Dollar at the close of business.
In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency crashed against its American counterpart during the session by 0.18 per cent or N2.73 to settle at N1,552.78/$1, in contrast to Monday’s closing price of N1,550.05/1.
But against the Pound Sterling and the Euro, the local currency traded flat in the official market yesterday at N1,906.98/£1 and N1,613.48/€1, respectively.
As for the black market segment, the Naira weakened against the Dollar on Tuesday by N5 to sell for N1,670/$1 compared with the preceding day’s value of N1,665/$1.
Meanwhile, the cryptocurrency market heaved a sigh of relief during the session as President Donald Trump created a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.”
The task force will be led by Commissioner Hester Peirce, a long-time advocate for the crypto industry, and will work closely with the crypto industry to develop regulations. This is after Mr Gary Gensler, an opponent of crypto, officially stepped down as chairman of the US Securities and Exchange Commission (SEC) after Mr Trump’s term started.
The task force will also work with Congress, providing “technical assistance” as it crafts crypto regulations.
Solana (SOL) recorded a 9.2 per cent growth to sell at $257.09, Dogecoin (DOGE) rose by 7.6 per cent to $0.36789, Ripple (XRP) added 4.0 per cent to finish at $3.18, and Bitcoin (BTC) increased by 3.7 per cent to $105,515.03.
Further, Binance Coin (BNB) appreciated by 2.8 per cent to close at $699.01, Cardano jumped by 2.1 per cent to trade at $0.9972, Ethereum (ETH) soared by 2.0 per cent to settle at $3,308.21, and Litecoin (LTC) went up by 1.5 per cent to end at $116.72, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
The price of the Brent crude oil grade went below the $80 mark on Tuesday after it shed 86 cents or 1.1 per cent to trade at $79.29 per barrel after the US President, Mr Donald Trump, signaled the possibility of his country boosting its oil production.
This move raised concerns of higher US output in a market widely expected to be oversupplied this year, with the US West Texas Intermediate (WTI) crude futures falling by $1.99 or 2.6 per cent during the session to $75.89 per barrel.
On his first day in office, the US President signed an executive order to unleash America’s energy by easing the barriers to oil and gas extraction and production and revoking a series of climate orders by former President Joe Biden.
As pledged in the campaign, the executive order follows the declaration of a national energy emergency.
The declaration includes measures to expedite energy infrastructure delivery, and emergency approvals by agencies “to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources, including, but not limited to, on Federal lands.”
This will likely confirm expectations that the oil market will be oversupplied this year after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the US and China.
President Trump also said he was considering imposing 25 per cent tariffs on imports from Canada and Mexico from February 1, rather than on his first day in office as promised.
The delay helped ease concerns of an immediate tightening of the market among US refiners, many of which are geared to process the type of crude oil supplied by these countries.
The US Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next.
On its part, the Organisation of the Petroleum Exporting Countries (OPEC) projects robust demand growth in the world both this year and next.
In 2025, OPEC says demand is set to grow by 1.4 million barrels per day leaving its projection unchanged from the December report.
However, losses were also limited after the US president said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.
Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea.
Yemen’s Houthis said on Monday they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
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