Hello ,
The market on friday was bearish .Market capitalisation stood at 11.6 t,volume tradedwas 619,577,no of deals 16,164.while 16,164 deals were made.top gainers include Nestle-11.25,JBerger-5.73,Conoil-5.77.
Ipromised a talk with a notable stock broker.that talk comes up on monday june 16th .Meanwhile the management of exchange briefed the financial press and stock brokers on the recent price stabilisation on the market .The piece is just a few lines away.
THE FEDRAL government will be fund it’s 7 point agenda through the capital market .We have something on that too.
I want to know your view on all or some of these information .Iwant to hear from you .mail your comment through the comment page .i ll see you on monday.
PRICE CONTROL OF EQUITIES NORMAL ;NSE
BANKS NOT MANDATED TO STOP THE ISSUANCE OF LOANS TO STOCKBROKERS
At the stock market Thursday ,when the information went round that the Director General was going to brief stock brokers and the financial press –not too many people were unaware of the direction of the pendulum .If nothing else ,Okereke Onyiuke was going to speak on the price control of equities quoted on the floor of the exchange. But then other issues were raised.Infact they were almost thoroughly dealt with. Indiscriminate issuance of private placement was one re-capitalisation of stock broking firms another and the listing of stock broking firms on the floor of the exchange .
‘It is not unusual to find stock exchanges worldwide intervening to curb free fall of equities in the their market.’-This was the first submission of the Director General of the Nigerian Stock Exchange Dr.Ndii Okereke Onyiuke as soon as stock brokers and the financial press were seated. According to the DG ,she could not understand the frenzy about price control through executive fiat .She said the financial press should be very learned about how stock exchanges operate in other to properly inform the public when certain things occur in the market .She said that the fact that an equity depreciated in the price does not mean that the investor has lost his portfolio .She reiterated the fact that the market is very strong and has not been manipulated in any way .
The Director General also wondered aloud on the continuous fall of equity prices for this quarter .She said that stock brokers trading pattern will be examined to find out those brokers whose equities are constantly going down .She said there is a need for stock brokers to interact more among themselves during trading in other to gather enough facts about the equities they are buying and selling,the high automation at the exchange not withstanding .’ The need for a human angle cannot be overemphasized’,she said .
On the issue of a mandate from the Central Bank of Nigeria to Banks to stop the issuance of loans to stockbrokers for the purposes of buying shares, Okereke Onyiuke said there was no such directives from the Central Bank Governor Professor Chukwuma Soludo.She said that she personally called the Governor to confirm the rumour and he said he did not give any such directive .She therefore told stock brokers to visit their bankers .
Then came the issue of constant private placements .The Director General was of the opinion that the private placements were not being done in the proper manner. She said guide lines for floating private placements were constantly been flouted. She warned stock brokers to henceforth desists from participating in private placements .She Said that any stock broker found getting involved in private placements will be dealt with accordingly
She advised companies to follow the guide lines for private placements .The guidelines include :The participation of not more than 50 investors ,the establishment of a placement memorandum as against a prospectus ,no advertisement ,no completion board meeting amongst other procedures .
She made the gathering to understand that companies will henceforth be listed at the price at which they did their private placement .For example ,if a company did their private placement at 2.00 then their quotation prices should be at the 2.00.She noted that private placements have somehow contributed in the down ward trend of the market as investors were selling their shares to partake in private placements .Saying that most the private placements do not have the intention of coming to the market .
When the directive came that stock broking firms should re-capitalise to the tune N1b ,some stock broking firms in a bid to meet up with the capital requirement got involved in private placements in other to raise more money and also in preparation to being listed on the floor of exchange .This development the DG said will amount to double standard a.She said that stock broking firms are not supposed to trade on their own equities.She then told interested stock broking firms to register companies that will be engaged in other financial services complete with new names and forward such names to the exchange for approval before monies could be collected for private placements
As the gathering was interactive ,a stock broker ,Mr. Emeka Madubuike wanted to know what will happen to stockbrokers in companies that were not able to scale the re capitalisation exercise where a minimum of 40 and a maximum of 100 stock broking companies are expected to emerge .He observed that there will be a gap which will need to be filled as obtained in the banking sector where the Central Bank after the re capitalisation exercise had to license about 800 Micro finance Banks because there was a gap to be filled .The DG replied that the exchange might not have to establish a’Mcro Stock broking firms ‘,but that smaller investors will be taken care of .She assured stock brokers that dialogue is on going on the re- capitalisation exercise and some issues that might arise from the exercise .She advised stock broking companies to meet up with re capitalisation first .She however said that licenses of companies that did not meet up with the re capitalisation will be revoked as against allowing them to sell their licenses .
Another notable stock broker and former president of the chattered institute of Bankers Of Nigeria ,Mazi Okeckwukwu Unegbu told the exchange to look into the merging of stock broking firms and also to engage in constant discussion and training of the financial press in other for them to be better informed on how the market works .He said this will greatly influence the quality of information being disseminated by the financial press
GOVERNMENT PROJECTS TO BE FUNDED THROUGH THE CAPITAL MARKET
The 7 point agenda of president Umaru Musa Y’Aaradua will be funded thrugh the capital market .How to go about realising this will be the focus of the forth coming national conference on Financing The 7 POINT Agenda OF the Fedral Government through the Nigerian Caoital Market .
The chairman of the organising committee ,Mr.Kayode Falowo said that the conference which is being organised jointly by Securities and Exchange Commission (SEC),THE Nigerian Stock Exchange (NSE) and the Association of Issuing Houses of Nigeria (AIHN) was necessitated because of the dire need for development in Nigeria .He said that the seven point agenda is geared towards making Nigeria one of largest twenty economies in the world by 2020 and therefore should be given priority when it comes to implementation .Falowo said that among the important platforms to actualising the seven point agenda are power and energy ,food security and agriculture ,Wealth Creation and Employment and Mass Tranportation.Other platforms include Land Reform ,Security and Qualitative and Functional Education .
He said the Federal Government stance that it cannot shoulder the development responsibility alone has birthed the idea of funding through the capital market. He said that the conference which will provide the platform for mobilising the Nigerian business community to embrace government’s vision and embrace it’s realisation is expected to draw participation from key stakeholders on various sectors of the economy .He said that facilitators and resource persons are to be drawn from within and outside the contry He added that infrastructure is critical to the effective functioning of an economy .’this will develop the private sector which is the engine of any economy and positioning of country for global competetiveness’he said
H e also said that proceedings at the conference will prompt the various arms of the government into identifying means of financing the implementation of the 7 point agenda .’the capital market is expected to assist in the packaging and raising of funds required for the projects .The market will ensure transparency and accountability ,and also provide a variety of financing instruments such as equities,bonds ,mortgage backed securituies ,asset backed securities ,Real Estate Investment Trus among others .Falowo said
