As an investor in shares it is very likely that you may have come across incidences of unpaid dividends either due to the dividend warrants getting expired or the dividend warrants never even getting to you at all. Recently, I embarked on a mission to get back some of my unclaimed dividends from yester years as well as ensure I never again miss out on my return on investments, otherwise called dividends. Here is a step by step guide of how I did it.
Get a List of All Your Shares
The first thing I did was to visit my stockbroker requesting for an updated list of all the stocks that I own in the Central Securities Clearing System (CSCS). You can actually get this printed online yourself if you register with the CSCS. I also took a list of all the share certificates I have just to be sure my entire portfolio is accounted for.
One can also search for one’s name using this link
It will pull up a list of companies that one has unclaimed dividends in, as well as the registrars involved.
Obtain a list of the respective Registrar’s for the Stocks you own
Every company listed on the floor of the Nigerian Stock Exchange has a unique Registrar that manages their outstanding shares on their behalf. The Registrars are mandated to manage all shareholder issues such as dividends, public offers, share certificates, bonus issues etc. on behalf of companies. Therefore if you are to get back your dividends you will have to know who your registrars are.
Sign a Share Transfer Form
The stockbroker will give you a share transfer form for each of the shares you own. The form basically mandates the stockbroker to act as your agent, thus giving them the powers to process your unpaid dividends with your respective registrars. This service typically requires a token fee depending on the stockbroker. The fees can be a flat amount or percentage of the dividends you are expecting.
These all depends on the value of your dividends. The alternative will be for you to approach the registrars one by one by yourself just to get your unpaid dividends sorted out. This can be time consuming if you do not have the luxury of time for this. However, it does save you some fees which you would have paid to your stockbroker.
This process can last within a month or more depending on the efficiency of the registrar and the commitment of your stockbroker. You will also need to follow them up very often to ensure that you get your dividends on time.
I also used the same opportunity to process my e-dividends registration. E-dividend registration is basically a solution to the incidences of unpaid dividends. By registering for E-dividends, your registrars simply credits your bank account whenever dividend is paid out by any of your companies.
This process completely avoids the more common paper dividends and has the added benefits of ensuring that you never lose your dividends and that they get paid to you on time. Considering that I still received a number of paper dividends I informed my stockbroker that I wanted to switch to E-dividends. I was then given a set of E-dividend forms of the respective registrars for each of the companies I owned shares in following which I filled the forms.
A typical E-dividend form will contain the name of the bank which you intend your dividend to be paid into, the address of the bank, Nuban Bank account number, sort code, the name and address of the shareholder, name of stockbroker, email address, company seal (if it is a registered company) etc. Registrars typically have various formats but contain basically the same information.
Visit your Bank
After filling and signing the forms, you will have to take a copy to the banks as well for them to sign. Without the bank’s signature on your forms the e-dividend form may not fly. I found this quite rigorous as well as I hate to visit banks and prefer to transact online. However, considering the sensitivity of e-dividends, it is understandable that they make the process a lot more thorough.
You can prefer to use one bank only for your e-dividends if you do not like the stress of having to visit multiple banks and going through the same process all over again. Another advantage one bank gives you is that it makes dividend monitoring very easy as you only have to check one bank statement when it’s time to reconcile your dividends.
Back to the stockbroker or registrar
Once you are done with signing the e-dividend forms take it to your stockbroker, if you had mandated them to process your e-dividend on your behalf. Remember, you may have to give them a power of attorney to do that. Otherwise, you take the forms to the respective registrars yourself for them to complete the final leg of the registration. Again, the timeline for this depends on the registrar and how efficient they are in processing e-dividends.
You should also use this opportunity to follow up with your stockbroker or registrar about your past dividends which I had mentioned earlier. Remember, e-dividends will only be paid for subsequent dividends and not the ones that had already being paid but not credited to you.
Commercial Paper value appreciates by N243 billion YOY, hits N539.8 billion in H1, 2020
Commercial Paper value appreciated by 81.9% to N539.8 billion in 45 issuances as of H1, 2020.
Commercial Paper value hits N539.8 billion as of June 2020, as the value appreciated by 81.9% from N296.8 billion in 44 issuances as of H1, 2019 to N539.8 billion in 45 issuances as of H1, 2020. This is according to a recent report by PWC titled, “Nigeria Capital Market Update.”
As regards industry spread, the financial services sector accounted for 32% of the proceeds raised as of H1 2020, followed by the consumer goods sector representing 26% of total proceeds. ICT raised 19% and Industrial goods contributed 18%.
In terms of yearly appreciation, Commercial Paper value has maintained an upward trend, recording N114 billion as of the end of 2016, N221 billion in 2017, N402 billion in 2018, and N540 billion in H1, 2020.
What this means
Activities in the Commercial Paper market maintained its upward trajectory as more blue-chip companies continue to access short term funding from a diversified investor base, through the capital market and on favorable terms.
What you should know
Commercial Paper is a commonly used type of unsecured, short-term debt instrument issued by corporations, typically for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities. Maturities typically last several days and rarely range longer than 270 days.
It is usually issued at a discount from face value and reflects prevailing market interest rates.
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Nigerian Treasury Bills drop to 2% per annum
The latest data from Nigeria’s Treasury bill auction shows that Nigeria’s 364-day reduced by 2%.
The latest data from Nigeria’s Treasury bill auction shows that Nigeria’s 364-day reduced by 2%. On the other hand, Stop rates moderated slightly for the 91-day tenors and 182-day tenors. The 91-day bills had stop rates of 1 % and 182-day bills also went by 1%.
At the auction, the Debt Management Office (DMO) sold N12.76 billion on the 91-day paper, N4.5 billion on the 182-day, and N107.6 billion on the 364-day bill despite huge demand from Investors.
What you need to know
Basically, when the government goes to the financial markets to raise money, it can do it by issuing two types of debt instruments – Treasury Bills and Government Bonds. Treasury bills are issued when the government needs money for a short period, while Bonds are issued when it needs debt for more than say five years.
- The issuance of treasury bills is also used as a mechanism to control the circulation of funds in the economy.
- Treasury bills have a face value of a certain amount, which is what they are actually worth.
- However, they are sold for less. For example, a bill may be worth N10,000, but you would buy it for N9,600.
- Every bill has a specified maturity date, which is when you receive the money back.
- The government then pays you the full price of the bill (in this case N10,000), giving you the opportunity to earn N400 from your investment. The amount that you earn is considered as the interest, or your payment for lending money to the government.
- The difference between the value of the bill and the amount you pay for it is called the discount rate and it is set as a percentage.
What they are saying
Peter Omoregie, CFA, Head Proprietary Trading at CardinalStone Partners Limited, in a phone interview with Nairametrics, explained why investors oversubscribed Nigeria’s Treasury bills in spite of low rates.
“The CBN continues with de-leveraging its balance sheet and favoring its growth policies over the attraction of FPI money, which is good for businesses and the country at large. Surprisingly, we had a huge subscription on the long end at these low rates. The local institutional investors are addicted to Tbills like a junkie on cocaine, they don’t know how or when to stop.”
Why this matters
The massive disparity between the subscriptions and the offers recorded suggests investors are willing to earn a negative real return, compared to the higher risk in other assets such as stocks and real estate. Basically, the CBN sells T-bills on a bi-weekly basis to investors and it is one of the safest investments available. Interests are paid upfront and the principal paid in full upon maturity.
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Nigeria will not issue Eurobonds, says Vice President Yemi Osinbajo
Vice President Yemi Osinbajo disclosed recently that Nigeria will not be issuing Eurobonds.
Vice President Yemi Osinbajo disclosed recently that Nigeria will not be issuing Eurobonds due to their costs, and was considering further options in capital to boost Africa’s largest economy in the face of a looming recession.
The Vice President said this in a report credited to Reuters News.
“We are not likely going to explore again the Eurobond market because we are trying to avoid commercial borrowing,” Osinbajo said.
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Africa’s largest economy has been on the squeeze, with the worst pandemic known to man, disrupting Nigeria’s major export earning, crude oil, and the poor participation of foreign portfolio investors which crunched Nigeria’s earning at unprecedented levels.
However, Michael Nwakalor, a Macroeconomist at CardinalStone Research, in a note seen by Nairametrics gave key vital insights on why Nigeria’s fiscal players might consider such a move in view of taking the FGN 2021 budget into play.
“In our view, given its ever-widening budget deficit and concurrent FX needs, Nigeria may be tempted to revisit the Eurobond market next year after having shelved plans to raise $3 billion in 2020 following the COVID-19 outbreak. However, a return to the international debt market may, ultimately, depend on external financing conditions. Even though weaker oil prices and domestic FX liquidity issues are concerning, the Fed’s long-term dovish posture and relative stability in the Eurobond market suggest that a few providers of long-term capital may still be up for some risks. That said, investors are likely to demand a premium to pre-pandemic levels of c.7.5%, on duration, for a potential Eurobond issuance,” it stated.
If recent body language, statements by Nigeria’s fiscal policymakers are taken into full consideration, it’s likely Nigeria might consider multinational lenders like World Bank rather than going to the overseas debt market, as the nation seeks cheaper options in building its commodity-dependent economy.