NSE: 13 Active Dealing Members Have Insufficient Shareholders Funds

 

The Nigerian Stock Exchange has disclosed that two months after the curtains were drawn on the recapitalisation of capital market operators, not less than 13 dealing members of the exchange are operating with insufficient shareholders’ funds.

The information which was made available on the exchange’s website showed that the 13 firms with inadequate shareholders’ funds were among 53 firms deemed to have fallen short of the requirement to operate as dealing members of the bourse.

The NSE disclosed this in its Brokers Track report designed to help reduce contravention of market rules to its barest minimum while doing all within its means to restore confidence.

The list of the 13 firms with inadequate shareholders’ funds but which are still active on the floor of the exchange include Covenant Securities & Asset Management Limited; Cradle Trust Finance & Securities Limited, Excel Securities Limited, Finbank Securities & Assets Management Limited, First Stockbrokers Limited, Mercov Securities Limited, Redasel Investments Limited, Resano Securities Limited, Stanwal Securities Limited, Summa Guaranty & Trust Company Limited, UIDC Securities Limited, and Yuderb Investment & Securities Limited.

The list included that of the other 30 companies listed in this category but which have been inactive for about a period of six months or thereabout.

Other dealing members listed include the 30 inactive ones and some of them are Aims Asset Management Limited, Allbond Investment Limited, Anchorage Securities & Finance Ltd, Bytofel Trust & Securities Limited, Cadington Securities Limited, CEB Securities Limited; Consolidated Investment Limited, Dakal Services Limited, Davandy Finance & Securities Limited, Decanon Investment Limited, Emi Capital Resources Limited, Empire Securities Limited, First Alstate Securities Limited, GMT Securities & Asset Management Limited, Gombe Securities Limited, Kakawa Asset Management Limited and LB Securities Limited, among others.

According to NSE, an inactive firm is a firm that has been suspended for a period of more than six months by SEC or has not recorded any activity for a period of three or more months without being suspended.

The recapitalisation programme for capital market operators  undertaken by the Securities and Exchange Commission (SEC) over a period of two years effectively ended on September 30, 2015 after a nine-month extension from December 31, 2014.  Under the recapitalization programme, dealing members of the Exchange who are primarily broker/dealers were mandated to shore up their operating capital from N70 million to N300 million either by injection of fresh fund or mergers and acquisition.  Those firms that were not able to meet the new capital requirement were offered the window of reclassifying their operations by taking licensing in line with their capital base.

The recapitalisation programme was expected to have shored liquidity in the capital market and help to prop up demand. 

However, two months after the conclusion of the exercise the market is yet to feel the impact of improved liquidity.  This has made market watchers to query the process by which majority of the operators met the recapitalization deadline.

Meanwhile, reports have it that about 97 per cent of Capital Market Operators (CMOs) have complied with the Securities and Exchange Commission (SEC) new minimum capital requirement.

The final list of CMOs that met the deadline represents 437 out of the total 449 registered capital market operators published after the necessary capital verification that was conducted on September 30, 2015 deadline.

The commission on its website listed four operators processing merger applications approvals and court sanctioning.

Chairman, Association of Stockbroking Houses of Nigeria (ASHON), Mr Emeka Madubuike, was quoted as saying that; the level of stockbroking firms compliance was high.

The board of the SEC in 2013 announced new minimum capital requirements for all categories of market operators in pursuant to Section 313(6) of the Investments and Securities Act (ISA) 2007.

The apex regulator of the nation’s capital market increased minimum capital base for broker/dealer by 329 per cent from the existing N70 million to N300 million. A broking firm, which operated with capital base of N40 million, now has N200 million, representing an increase of 400 per cent.

The minimum capital for corporate investment advisers was however retained at N5 million, unlike individual investment advisers who would only operate with a 300 per cent hike in capital base from N500,000 to N2 million.

BRIEFS OPEC President

Ahead of his assumption of office as the new President of the Organisation of Petroleum Exporting Countries (OPEC), the Minister of State for Petroleum Resources, Dr Ibe Emmanuel Kachikwu, has promised to tackle the issue of oil price volatilities.

Kachikwu replaced the immediate past Petroleum Minister, Diezani Alison- Madueke, who was named as the first female president of OPEC at the 166th Ordinary Meeting of the organisation in November 2014.

While unfolding his plans for OPEC, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), promised to do his best to delay Iran’s intended oversupply of crude oil in order to control pricing.

Speaking during his tour of plants of oil marketers in Lagos last week, he said the issue of oil price is very sensitive and should be addressed in order to stabilise the market.

Power

The US Ambassador to Nigeria, Mr. James Entwistle has said his country will assist Nigeria to increase its power generation.

Entwistle spoke last week in Abuja when he visited the Minister of Science and Technology, Ogbonannya Onu, in his office.

He said that the US would assist the country through “Power Africa Programme” to increase power generation, distribution and transmission.

“We are looking for stronger role by private sector in the power industries to support Nigeria for better generation, transmission and distribution.

“We will encourage large private power companies to come and invest in Nigeria because we see the private sector as a solution to many of the energy challenges in Africa,” he said.

The ambassador said that the US was also set to collaborate with the ministry to assist in other areas to promote science, technology and innovation toward national development.

Labour

Nigeria Labour Congress (NLC) President Ayuba Wabba has said a new minimum wage will soon be presented to the government.

Speaking at the delegate conference of the Non Academic Staff Union (NASU), Wabba said since the five- year period stipulated for the review of the minimum wage had lapsed, the NLC was working in collaboration with the Trade Union Congress (TUC) to arrive at a figure to be presented to government.

He said the recent announcement by governors under the Nigeria Governors Forum that they could not continue to pay the N18, 000 minimum wage was part of a ploy to frustrate the demand for an upward review.

He vowed that the congress would make the states ungovernable for any governor that tinker with the current minimum wage, pointing out that the leadership of the labour movement in the country was committed to a review.