Are you one of those people with dozens of share certificates and dividend warrants stashed in a drawer or safe in your house? Perhaps it was handed to you by your father or grandfather, or maybe it is even yours and you don’t know what to do with it? Maybe you are currently based outside Nigeria and wondering what has become of all the shares you bought during the stock market boom and how you can track it considering that it may have had a rebound following the ensuing crash?
On today’s article, we will attempt to explore what to do with share certificates and how you can track stocks you may have lost years ago.
What are share certificates?
Share certificates are physical evidence of your ownership of shares in a private, public or quoted company. For quoted companies, they are typically issued during Initial Public Offerings (IPO’s) or Public Offerings. Until recently, such offerings were strictly accompanied with share certificates which often arrive months after the offers are closed.
How Can I Make Use of them?
Share certificates can be used in several ways. You can use it as a collateral for a loan of the underlying shares is worth a lot. You can also monetize it by selling part or all of the shares listed in the top right or left corner of the share certificate
How Do I Monetize My Share Certificate?
To monetize your share certificate, you will have to open a stock brokerage account if you do not already have one. You hand over the certificates’ to your stockbroker and instruct them to convert the shares into tradable stocks, a process called Dematerialization. Once the share certificates are dematerialized, it enters the database of the Central Securities Clearing System (CSCS) and you can now sell it.
[Read Also: How to use profits to determine what stock to buy]
What if the shares is not in my name?
This is not an uncommon phenomenon, seeing as people sometimes buy shares in the name of their children or loved ones. In that instance, if the person is a minor then you will have to open an account for the person which you will manage on their behalf. If the person is above 18 then you may have to obtain their consent to manage the shares on their behalf. If you bought the shares in a family name, then there will have to be a joint account opened or a trustee mandated to manage the shares.
What if the company no longer exists?
That is a possibility. However, some companies may no longer exist in their previous forms because they have transformed into other companies either through name changes, mergers, or a takeover. If that is the case, then all you need to do is go online do a search in order to locate the name of the registrars of the company.
If the company no longer exists because it has been liquidated, then you can also contact the registrar who will link you up to the liquidator in the event that they were able to recover some funds for shareholders.
Am I sure the shares have value?
Quoted Shares, provided they exist have a market value. To determine the value of quoted shares you can go to the website of the Nigerian Stock Exchange and download daily stock prices. You can also get that in the website of the CSCS. Once you determine the price, multiply it by the number of shares on your share certificate and you can easily determine the value.
Is it possible I have shares unbeknownst to me?
A lot of people loose share certificates either through post or undelivered mails. It could also be that it was stolen or just missing. Some could also have gotten a bonus issue but are unaware of this. Whatever, the case it you can recover these lost shares by going to the registrar of the company. You can also mandate your stockbroker to check with the CSCS as the shares may have been lodged with them especially if it was an e-bonus or is already dematerialized.
I don’t know what happened to all my shares since the crash?
Don’t worry you are not alone in this. The first thing you should do is try to locate your CSCS number which is given to everyone who trades in shares. You can also then contact your stockbroker and ask that they give you your statement from inception till date. If you do not remember who your stockbroker is then approach a new one with your CSCS number and ask that they locate your portfolio. You may have to register with them as well before this service is rendered.
[Read Also: What Is A Stock Split and How It Affects You]
What if I am living broad?
If you are living abroad and don’t have access to a stockbroker, just go to the website of the CSCS and click on their contact to get their details and give them a call, you can also click on their product and services portal and follow the prompts. Once you register with them after paying some fees, you will be able to view all stocks bought in your name irrespective of the stockbrokers including their current value.
Flour Mills moves to diversify funding sources with N29.8 billion bond listing
Flour Mills Nigeria Plc lists N29.8 billion bonds to diversify funding sources from the Nigerian capital market.
Flour Mills Nigeria Plc’s fresh N29.8 bond listing will help the nation’s leading food business company to explore diversified funding sources from the Nigerian capital market, with the hope of enhancing growth and the development of the company.
This statement was made by the Group Managing Director of FMN, Mr. Omoboyede Olusanya, at the listing of the Tranche A and Tranche B bonds valued at N29.8 billion on the Nigerian Stock Exchange (NSE).
The food and the agro-allied company which has remained Nigeria’s largest and oldest integrated agro-allied business with a broad profile and robust Pan-Africa distribution issued these bonds under its N70 billion Bond Issuance Programme.
Olusanya said that the company would continue to explore funding opportunities inherent in the capital market to ensure business growth and continuity.
While speaking about the Credit Rating of the Programme, he disclosed that FMN’s credit rating, as well as the operational financing of the Group, have improved considerably.
According to him, the bonds floated by Flour Mill will help to strengthen the company’s capital base and provide the needed working capital required by the Company. He added that Flour Mills Group will continue to deleverage and replace short term financing with longer-tenured and lower price funding to optimize capital structure and reduce financing cost.
He noted that Flour Mills will continue to explore opportunities to raise fundings via the capital market as this enables the company to diversify its funding sources and continue to play a role in the capital market as a significant player in it.
What they are saying
The Group Managing Director of FMN, Mr. Omoboyede Olusanya, at the virtual event, said;
- “We are delighted with the response from the market, we are happy to be listed.
- “We are introducing an N29.9 billion listing under an N70 billion bond issuance cover; we will continue to raise funding to diversify our funding sources.
- “The company remains passionate about feeding the nation to improve the quality of living for Nigerians through increased production and investments in backward integration.”
What you should know
- With the successful issuance of the new N29.8bn Tranche A and Bonds, FMN has utilized its bond issuance program registered in 2018.
- It is important to note that the Senior Unsecured bond listing includes an N4.89bn under Series 4 Tranche A of the bond issuance programme, at a 5.5% rate for 5 years, due by 2025, and a 25bn under Series 4 Tranche B of the same program at a 6.25% rate for a tenure of 7 years, due by 2027.
- The bond proceeds will be used to refinance existing debt obligations. It will also help the company take collaborative actions to diversify the company’s financing options beyond expensive short term debt.
January 2021 FGN Bond records oversubscription of N88.3 billion
FGN bond offer has received a total bid of N238.28 billion across all tenors.
The January 2021 FGN bond offer has received a total bid of N238.28 billion across all tenors, indicating it was oversubscribed by approximately N88.3 billion.
This fact was implicitly revealed through a disclosure by the Debt Management Office (DMO), seen by Nairametrics.
Nairametrics had earlier reported the offering of N150 billion worth of FGN bonds by the Debt Management Office for January 2021. In line with the notice, the auction occurred on the 20th of January, 2021 (yesterday).
The following are the key highlights of the 2021 FGN bond auction;
- A total of N91.84 billion was submitted for the 10-Year tenor worth N50 billion, implying that it was oversubscribed by N41.84 billion.
- The 15-Year tenor recorded a total subscription of N106.37 billion, implying an oversubscription of N56.37
- On the other hand, the 25-Year tenor was undersubscribed by N9.93 billion, after it recorded a total subscription of N40.07 billion.
What you should know
- Recall that the December 2020 FGN bond offer was oversubscribed by more than N70 billion, as reported by Nairametrics.
- Nairametrics learnt that the oversubscription is sequel to higher rates across all tenors for January 2021, at 7.98%, 8.74% and 8.95% for the 10-Year, 15-Year and 25-Year period respectively, compared to the rates of 6.945% and 7.00% for the 10-Year and 15-Year tenors at the last auction in December 2020.
Collapse in domestic bills and bonds yields forcing local funds into stocks
A collapse in yields on domestic bills (3 months at 0.35%) and bonds (five-year at 3.5%) is forcing local funds into stocks.
EFG Hermes has stated that a collapse in domestic bills yield (3 months at 0.35%) and bonds yield (five-year at 3.5%) is forcing local funds into stocks.
This is according to a recent report by the company tagged: 2021 The Year Ahead — Is the Recovery in the Price?
The report notes that current fixed income yields, of which bills and bonds are a part, seem unsustainable – citing that real 12 month yields are -13.8%. Hence, the report suggests that the country is likely to remain a cautious market for foreign investors in 2021.
Despite the awareness, the company is of the opinion that fixed income yields in Nigeria could stay higher than 2020 lows for the next few months, which may lead to heavy bond issues in early 2021, as precedent suggests.
- The company believes that the macro context is weak and policy-making is unpredictable in the country – pointing that although the country is facing a slow-burning BoP and fiscal crisis, it appears the authorities are making little efforts towards the difficult decisions necessary to put the economy and market on a sustainable footing.
- This may, according to the company, impact earnings growth negatively in 2021 and 2022.
Accordingly, the report contends that this is one of the reasons why foreign investors avoid investing in the country’s instruments – noting that foreign investors seem to be happy selling to the local institutional bidders so that current data on holdings and flows depicts there is not much foreign money left in the market – as illustrated by foreign and domestic portfolio investment.
What EFG Hermes is saying
- “While foreign portfolio investors are seeing some relief on the backlog, until we see serious policy changes, we do not think foreign investors will become net buyers of Nigerian stocks. There is no indication that such changes are in the pipeline.
- “We, therefore, expect a rising share of future net contributions to go to stocks, as well as cash coming from bond and bill maturities. However, we note that PFAs remain reluctant buyers, and the list of stocks in which they are happy investors is short.”