Stocks zigzag on mixed sentiments, ASI records modest gain

Nigeria Stock Exchange

Nigeria Stock Exchange

• SEC directs registrars to return unclaimed dividends to paying firms
• No more extension on compliance with new Minimum Capital Requirement

THE equities market closed yesterday on a positive note, as Nigerian Stock Exchange (NSE) All Share Index (ASI) appreciated by 0.05 percent to close at 34,061.89 basis points, compared with the 0.77 percent depreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at 1.72 percent

Market breadth closed negative as Vono led 26 gainers against 19 losers topped by Intenegins at the end of yesterday’s session – an improved performance when compared with previous outlook.

Market turnover also closed negative as volume declined by 34.23 per cent against 52.10 percent decline recorded in the previous session. Zenith Bank, ETI and UBA were the most active to boost market turnover. Nigerian Breweries and Guaranty topped market value list.

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

Meanwhile, the Securities and Exchange Commission (SEC) has directed all registrars of public companies to return all unclaimed dividends, which have been in their custody for 15 months and above, to the paying companies.

Registrars are required to file evidence of remittance with the Commission not later than June 30, 2015.

The SEC also hinted that ‘failure to comply’ with this directive shall attract appropriate sanctions without further recourse.

According to SEC official data, unclaimed dividends had increased sharply from about N27.8 billion in 2008 to N41.3 billion in 2009, only to hit N41.7 billion in 2010. In 2011 it hit N50.2 billion but slightly increased further to N50.7 billion as at September 2012.

By the end of 2012, SEC put unclaimed dividend at N60 billion. Unclaimed dividend is currently estimated at more than N70 billion, based on its three-year growth average.

Dividend becomes unclaimed when the companies declare them and the beneficiaries are unable to get them due to whatever reason, which might include problem of post offices, change of address, death of beneficiaries among others.

The Companies and Allied Matters Act (CAMA), however states that unclaimed dividends becomes statute barred after 12 years, after which it would be ploughed back to the companies.

SEC has also issued a circular to all capital market operators who are yet to comply with the new minimum capital requirement; advising them to do so before the deadline of September 30, 2015.

In the circular, the Commission reiterated its commitment to this deadline and affirmed it would not grant any further extension.

The Commission in December 2013 approved the new minimum capital requirements for Capital Market Operators (CMOs) aimed at improving operators baseline infrastructure, market access and service delivery.

The deadline for compliance by existing CMOs is September 30, 2015 while compliance was stated as a prerequisite for the registration of new CMOs. These guidelines are intended to serve as a guide to all capital market operators in meeting the new requirements.

For the purpose of regulation, Capital Base is construed as the shareholders’ fund comprising paid up share capital, reserves, and accumulated losses.

Components of shareholders’ funds include: Paid-up share capital (that is, ordinary shares and irredeemable preference shares), capital reserve, general reserve, revaluation reserve (tangible assets) as well as retained earnings

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