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Stock Market

NSE announces the inauguration of a 5-man claims review panel

The panel was inaugurated in preparation of the imminent demutualisation of the NSE.

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Nigerian Stock Exchange, sound, C & I Leasing Plc, NSE launches factbook, Top 10 stockbroking firms, Steroids from GTBANK, ZENITH Lift Nigerian bourse, as investors gain N94.2 billion , Steroids from GTBANK, ZENITH Lift Nigerian bourse, as investors gain N94.2 billion

The Nigerian Stock Exchange has announced the inauguration of a five-man claims review panel in preparation for the Exchange’s imminent demutualisation.

The disclosure was made by the NSE (The Exchange) through a verified post on their website, seen by Nairametrics.

The formation of the panel is pursuant to the provisions of the Demutualization of the Nigerian Stock Exchange Act 2018.

The experts appointed into the panel are; Mr. George Etomi (Chairman); Mr. Seni Adio, SAN; Mr. Abatcha Bulama; Dr. Paul Anababa, SAN and Prince Aghatise Erediauwa.

What this means

According to the notice, the Panel will help in dispute resolution by independently reviewing and determining Claims made by individuals or corporate bodies in respect of any rights to the shares of the demutualised Exchange.

In addition, the Panel will perform an adjudicatory role by acting in an appellate capacity for dissatisfied claimants who objects any decision of the National Council of the Exchange on a claim pre-demutualization or the Board of Directors of the HoldCo after the demutualization process.

What you should know

  • Demutualization is the process by which an exchange is converted from a company owned by members or brokers, to one in which members of the public can buy shares.
  • Nairametrics learnt that the panel was inaugurated on the 21st of December, 2020.
  • As part of the demutualisation process, The Exchange (which is currently a company limited by guarantee) would be converted into and re-registered as a public company limited by shares.
  • In lieu of this, current Members of The Exchange will be allocated shares in the HoldCo.
  • The Group will have three operating subsidiaries – Nigerian Exchange Limited (NGX), the operating exchange; NGX Regulation Limited (NGX REGCO), the independent regulatory arm; and NGX Real Estate Limited (NGX RELCO), the real estate company – forming the group.
  • In line with the demutualization agenda, Nairametrics earlier reported the appointment of Oscar Onyema as the new Group Chief Executive Officer, Nigerian Exchange Group Plc, and the appointment of Temi Popoola and Tinuade Awe as CEOs of Nigerian Exchange limited and NGX Regulation limited respectively.

Historical background

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Efforts to demutualize the Nigerian Stock Exchange have been a long-standing one.

  • The Securities and Exchange Commission (SEC) in 2015 issued the Exposure draft rules on demutualization of exchanges in Nigeria.
  • The same year, the Nigerian Stock Exchange appointed a consortium of Rand Merchant Bank (RMB) and Chapel Hill Denham (CHD) as financial advisers to facilitate the proposed demutualization.
  • In 2018, the House of Representatives passed a bill that amended the laws that established the NSE. This is sequel to a similar action by the senate, all in a bid to hit the ground running for the take-off of the demutualization process.

Chidi Emenike is a graduate of economics, a Young African Leadership Initiative Fellow and an Investment Foundations certificate holder. He worked as a graduate Teaching Assistant in the Federal College of Education Kano and is also a trained National Peer Group Educator on Financial Inclusion

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Markets

Nasdaq continues to fall as Dow sets new high

The Dow Jones Industrial Average rose 97.31 points or 0.3% to close at 34,230.34, a new high.

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The Dow Jones Industrial Average rose 97.31 points or 0.3% to close at 34,230.34, a new high.

The S&P 500 index increased by 0.1% to 4,167.59 points. However, the Nasdaq Composite dropped 0.4% to 13,582.42, as Amazon, Netflix, and Facebook both fell more than 1%.

The sharp drop in growth stocks the day before came after Treasury Secretary Janet Yellen indicated on Tuesday that interest rates would need to rise to prevent the economy from overheating, with economic activity rebounding much faster than anticipated as vaccines are administered and social distancing requirements are relaxed. Later in her remarks, she clarified that she was not “predicting or suggesting” a near-term interest rate hike because the Federal Reserve makes that decision.

Nonetheless, some companies have stated that rising demand and supply chain shortages have driven prices higher, raising concerns among market participants about signs of overheating. According to an ADP study released on Wednesday, private payrolls increased by 742,000 jobs in April. This result fell short of economists surveyed by Dow Jones’ estimates of 800,000 jobs. The March report from ADP was revised upward by 48,000 workers.

According to economists polled by Dow Jones, the IHS Markit U.S. services purchasing managers index came in at 64.7 in April, beating expectations of 63.3. However, the ISM non-manufacturing index came in at 62.7, which was slightly below estimates. PMIs are measured so that readings above 50 indicate that an economic field is expanding.

After data from the American Petroleum Institute showed a sharp drawdown in U.S. oil inventory, oil prices initially soared, with futures for the U.S. benchmark West Texas Intermediate topping $66 per barrel. The United States of America West Texas Intermediate (WTI) crude settled at $65.63 per barrel, down 6 cents, or 0.09%.

As countries struggle to produce life-saving doses, the Biden administration declared on Wednesday that it supports waiving intellectual patent rights for Covid-19 vaccines. Following the story, large pharmaceutical firms that manufacture vaccines saw their stock prices plummet. Moderna’s stock has fallen by more than 6%.

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Business News

Sterling Bank posts gains amid dip in GT Bank and Zenith

The NGX Banking Index saw another decline for the second time in the month of May.

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Top banks’ stocks plunge, as bears overwhelms Nigerian tier-2 banks’ rally, Financial Institutions generate N24.77 billion VAT in 2020, up by 44.4% Y-o-Y.

The NGX Banking Index saw another decline for the second time in the month of May. The index points dropped to 345.00 depicting a loss of -1.69%. Technical analysis shows that the bears dominated the trading session from start to finish. The NGX Banking Index saw 4 gains opposing 5 losses with 1 stalemate.

Sterling Bank’s performance was outstanding again today with a profit of +8.11% pushing the price upwards from its previous close of N1.53 to N1.60. Technical analysis shows that bullish momentum was maintained throughout the trading session. Access bank also posted a profit of +3.36% pushing the price upwards to N7.70 from N7.45 from its previous day’s close.

Jaiz bank posted a profit of +1.67% pushing the price upward from N0.60 to N0.61. Ecobank was also saved from the claws of the bears as it held profits of +0.97% pushing the price to N5.20. Technical analysis says that the price went up to meet selling pressure plunging it downwards. However, the fall was not sufficient as Ecobank still closed in profit.

Guarantee Trust BANK saw its shares crashing down as it took a -3.65% loss plunging the price downwards from N30.10 at the previous day’s close to N29.00. Technical analysis shows that there was a steady sell-off as the bearish trend was maintained with minimal interruptions.

Zenith Bank was the 2nd biggest loser as it saw its share price crash down by -3.18% pushing price downwards from N22.00 to N21.30. Technical analysis shows that consolidation was maintained almost throughout the trading session before breaking to the selling pressure at the end of the trading session.

Wema Bank saw a dip of -1.64% pushing the price from N0.61 to N0.60. Union bank also posted similar losses of -1.02% to settle the price at N4.85 from N4.90. Fidelity bank was not left out of the loss as it plunged -0.44% settling price at N2.24.

UBA held a stalemate, settling its price N7.20.

Outlook

  • Market sentiments trend bearish as 5 losses were held with 4 gains and 1 stalemate.
  • Nairametrics advises cautious participation amid growing uncertainties.

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