Conflict and power tussle between two super exchanges in the capital market over the control of the Central Securities Clearing System Plc may trigger a new wave of instability in the capital market, The Guardian has learnt.
Findings by The Guardian showed that a crisis ensued when FMDQ declared interest in acquiring up to 1,080,641,902 units of CSCS shares in a transaction valued at about N20 billion, which will be about 21.6 per cent equity stake in CSCS. This is said to have unsettled some stakeholders. According to them, the lack of confidence in the market currently is not only triggered by the nation’s macroeconomic concerns but also by regulators’ poor handling of infractions and enforcement of discipline among stakeholders in the market.
“All the business going on in FMDQ ought to be transacted in NGX being the first platform. It is going to be ‘web’, you own part of me, I own part of you, there is going to be a web and when there is a web, there is going to be a big problem.” The shareholder insisted that any further move to reduce the influence and power of NGXGroup in the market would erode investors’ confidence and cause more companies to delist from the exchange.
For instance, the delisting of Diamond Bank and Ashaka Cement saw the removal of market capitalisation of N56 billion and N38.1 billion, alongside Seven up Bottling Company, Cappa& D’Alberto and IHS N52.2 billion, N18.7 billion and N16.7 billion market capitalisation robbed the stock market of close to N200 billion.
In August last year, news broke that GlaxoSmithKline Consumer Nigeria Plc had pulled out all its operations from Nigeria, seeding shivers through the market. Thus, the commission requested that FMDQ should propose remedies, which it is willing to implement in this regard, under Regulation 40 of the Merger Review Regulation 2020 .
According to him, the approved listing and trading of CSCS shares on FMDQ rather than NGX that birthed it is an indication that the regulators’ position on the matter is one-sided. Ajudua stated that the exchanges must be allowed to operate within the ambit of the laws in conjunction with their directors.
With close to N127 billion capitalisation of four listed firms pulling out from the stock market within eight months, shareholders had blamed the Securities and Exchange Commission for the renewed move by companies to delist voluntarily from the exchange and rising capital flight.
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