Stocks start week on bullish note, extend two-day gaining streak

By Bukky Olajide   |   19 January 2015   |   11:00 pm  

THE equities market closed yesterday on a positive note, as Nigerian Stock Exchange [NSE] All Share Index [ASI] appreciated by 2.54 per cent  to close at 29,773.40 basis points, compared with the 0.78 per cent appreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at 14.09 per cent.

  Market breadth closed positive as Guaranty led 32 gainers against 15 losers topped by UPL at the end of yesterday’s session- an improved performance when compared with previous outlook.

  Market turnover also closed positive as volume moved northwards by 63.12 per cent against 6.07 per cent decline recorded in the previous session. Mbenefit, Access and First City Monument Bank were the most active to boost market turnover. Guaranty and Nigerian Breweries topped market value list.

  On sectoral indices, banking recorded 5.13 per cent loss to emerge the most supportive sectoral index among others while oil and gas emerged as worst hit to close with 0.63 per cent

  Volume shockers included UPL which led the list of active stocks that recorded impressive volume spike at the end of yesterday’s session.

  Meanwhile, the National Association of Securities Dealers [NASD] has opened unlisted securities for lien arrangements

  ‘Lien’ is the legal right of a creditor to sell the collateral property of a debtor who fails to meet the obligations of a loan contract, if the debtor never pays, the property can be auctioned off to pay the lien holder.

   Before the NASD Over The Counter [OTC] market opened, unlisted securities were applied to lien with great difficulty and at great cost.    The arrangements were sometimes difficult to enforce if necessary and discounts on the value of the stock were usually deep (or at nominal value) due to absence of a universally accepted price (such as a daily closing price). 

  While the issues have been resolved, both shareholders and lenders have learned that OTC trading stocks now qualify for lien arrangements due to a joint effort of NASD OTC and Central Securities Clearing System [“CSCS”].

  NASD also provides universally acceptable prices as a reference while the clearing system will hold dematerialised shares according to the terms of the borrower / lender agreement. 

If the borrower pays, the shares are returned and if the borrower defaults the shares can be auctioned off on the NASD OTC market.

 



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