Dividends
SEC accuse CMOs of frustrating e-dividend mandate process
The DG of SEC revealed that 4.01 million accounts still have incomplete KYC information as of April 8 despite the government’s efforts.
The Securities and Exchange Commission (SEC) has faulted the activities of some Capital Market Operators (CMOs) which frustrates the e-dividend mandate process, leading to a rise in unclaimed dividends in the capital market.
This is as the unclaimed dividends in the capital market were estimated to have risen to over N200 billion.
According to a report from the News Agency of Nigeria (NAN), this disclosure was made by the Director-General of SEC, Lamido Yuguda, while speaking at the 2021 first post-Capital Market Committee (CMC) virtual news conference.
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What the Director-General of SEC is saying
Yuguda, in his statement, said that the commission was aware that some CMOs were frustrating the e-dividend mandate process.
He said, “We implore all stakeholders to comply with all directives of the Commission in this regard, as defaulters would be sanctioned appropriately. We have observed that the growth in the number of mandated accounts has been on the decline for some time.
The capital market community has directed its e-Dividend Committee to engage with the Committee of Heads of Banking Operations to encourage better cooperation from banks as we tackle the challenges of unclaimed dividends.’’
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The SEC boss reminded all CMOs that the commission’s directive on the update of investors’ Know Your Customer information was still in effect noting that the level of compliance had been low in spite of several engagements by the commission.
Yuguda revealed that 4.01 million accounts still have incomplete KYC information as of April 8 despite the government’s efforts.
He said, “Despite several engagements, we realised that as of April 8, there were still 4,012,311 accounts with incomplete KYC information. This exercise is critical to deepening the participation of retail investors and we direct all CMOs to accord it the highest level of priority.’’
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In case you missed it
- SEC had earlier urged all Capital Market Operators (CMOs) to update their investors’ Know Your Customer information due to the low level of compliance.
- The CMOs were also warned by SEC to stop providing any form of support to unregistered entities operating unlawfully in the country within the capital market as that would not be condoned.
Dividends
Seplat pegs exchange rate for its final dividend payment at N410.24/$
The value of the naira is down by 6.34% when compared with the N385.78/$ rate the company fixed for its interim dividend last year.
Nigeria’s leading independent oil and gas company, Seplat Petroleum Development Company has announced that an exchange rate of N410.24/$ will be applicable in the determination of its proposed final dividend of $0.05.
The company made this known in an announcement published on the Nigerian Stock Exchange “NGX” website, stating that the rates will be applicable to any shareholder that qualifies for and has elected to receive the dividend payment in Naira or GBP.
Since Seplat is listed on both the Nigerian Exchange Limited and London Stock Exchange, the exchange rates for the naira and the pound sterling amounts payable to shareholders were respectively determined with specific reference to the dollar.
Exchange rate
- 1 USD = 410.24 Naira
- 1 USD = 0.7197 GBP
What you should know
The CBN official exchange rate currently stands at N379/$. Checks at the time of drafting this report revealed that the Naira rate adopted by Seplat for the payment of its final dividend is the official rate for foreign exchange spot operations in the Investors and Exporters FX Window (NAFEX).
The recent exchange rate disclosed by the oil company speaks volume about the persistent fall in the value of the naira which is down by 6.34% when compared with the N385.78/$ rate the company fixed for the payment of its interim dividend six months ago.
What this means
The exchange rate proposed by the company seems fair as it holds a fairly robust premium of N31.24/$ when compared with the CBN rate of N379/$.
However, the Seplat rate is -15.41% or -₦74.76/$ low when compared with the parallel market rate of N485/$1.
Dividends
Nigerian stocks you can buy today and still qualify to earn dividends
The conditions given by a number of companies on NGX provide new investors with the opportunities to benefit from their dividends.
Listed entities on the Nigerian Stock Exchange “NGX” have taken active steps to make their shareholders happy and this is evident in the juicy dividends which these companies have announced so far in 2021 from the profit which they made through their operations in 2020.
Since the companies will be paying shareholders from the profit which they made last year, one would think those qualified to earn these dividends are investors who bought some ownership stakes in the company last year or those that bought the shares of the company early in 2021.
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Interestingly, this is not so as the conditions given by a number of these companies provide new investors with the opportunities to benefit from these dividends.
These conditions are flexible enough to permit anyone who buys stakes in these companies today the 27th of April, to receive dividends payment as stated in the companies’ initial dividend disclosure.
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Conditions for qualifying shareholders
To qualify for this payment there are some key important rules to abide by as a qualifying shareholder.
- Shares of the listed company must be bought at least 3 working days before the dividend qualification date.
- Shareholders must have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their bank accounts.
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Nestle Nigeria Plc (NESTLE)
The company in its guidelines revealed that only shareholders whose names appear in the Register of Members on May 21 2021, will be paid a final dividend of N35.50 per share.
Hence, to qualify for this dividend, new shareholders must purchase shares of this company not later than three working days before the 21st of May 2021.
The dividend yield of the company’s shares is put at 2.50%, as Nestle shares are valued at N1,450 per share at the open of market this morning.
By June 23, 2021, the dividends will be paid electronically to shareholders whose names were entered into the Register of Members before the deadline date.
Lafarge Africa Plc (WAPCO)
Lafarge recently announced that a final dividend of N1.00 per share will be paid to shareholders of the company whose names appear in the Register of Members as at 30th April 2021.
This means to qualify for the dividend payment, shares of the cement manufacturer must be purchased today, the 27th of April.
With the shares of Lafarge Africa Plc valued at N22.3 price on the exchange this morning, the company’s dividend yield is put at 4.48%.
The proposed dividend, if approved at the company’s Annual General Meeting will be paid on Tuesday, 25th May 2021 to the qualified shareholders.
MTN Nigeria Communication Plc
MTN has also set-out clear instructions in an announcement for investors to qualify to receive the proposed dividend payment of N5.9.
In line with the disclosure only shareholders of the company whose names appear in the Register of Members as at 4th of May 2021 will qualify to receive the dividend.
The dividend yield of the company’s shares is put at 3.58%, going with MTN’s market open price of N165 per share.
On May 26, 2021 the dividends declared by MTN will be paid to shareholders of the company whose names appear on the Register of Members as at May 4, 2021.
BUA Cement Plc (BUACEMENT)
The cement company in a recent disclosure informed the investing public that a dividend of N2.067 kobo has been proposed by the company’s board.
BUA Cement added that the dividend will be paid on July 23, 2021, to shareholders whose names appear in the Register of Members as at the close of business on July 9, 2021.
This means that to qualify for this dividend, the shares of the company must be purchased not later than three working days before the dividend qualification date.
With the N72.7 price of BUA Cement shares as of today’s open, the dividend yield of the company is put at 2.84%.
UAC of Nigeria Plc
The company in its guidelines revealed that only shareholders whose names appear in the Register of Members on June 14 2021, will be paid an ordinary dividend of 65 kobo per ordinary share; and a special dividend of 55 kobo per ordinary share, bringing the total dividend payout to N1.20 per share.
Hence, to qualify for this dividend, new shareholders must purchase shares of this company not later than three working days before the 14th of June 2021.
The dividend yield of the company’s shares is put at 10.95%, as its shares are valued at N10.95 per share at the open of market this morning.
By July 1, 2021, the dividends will be paid electronically to shareholders whose names were entered into the Register of Members before the deadline date.
What you should know
- It is standard practice that companies with strong financial performance pay shareholders dividends from profits, this practice allows shareholders to reap economic gains from the companies in which they own shares.
- On the dividend qualification date, the shares of these companies will be marked down on the Nigerian Stock Exchange, to reflect the total amount of dividend per share that shareholders will receive.
- After the approval of the dividends at their Annual General Meetings, companies maintain the culture of paying shareholders their dividends on the next business day after the AGM.
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