examines how the losses recorded by investors in the nation’s stock market and other factors are frustrating efforts to reduce unclaimed dividends
The market capitalisation of equities listed on the Nigerian Stock Exchange, which opened the year 2008 at N12.6tn, had hit an all-time high of N13.5tn in March but fell to a record low of N6.54tn at the end of the year. He said, “I just decided not to think about it because at 69, I have realised that there is more to this life. A lot of people committed suicide during that period because some of them borrowed money to buy shares.
“Since 2008, Nigerians have developed an aversion for the Nigerian stock market, as many of them have not recovered from their losses; it is almost impossible for them to come back and invest because people lost money. I understand some even committed suicide, while others had a stroke as a result of the shock,” he added.The stock market, after the 2018 crash, has been unstable, as it struggled to recover from the downturn.The stock market saw 34 new listings in 2011 valued at N2tn.
He said, “The global financial crisis of 2007 to 2009 caused many stock markets of countries to fall. Consequently, the Nigerian capital market was not insulated from this global malignant cancer. He said stocks were sold to people and they were made to believe that the market would never come down, with some people selling their properties to buy shares.
According to Mobolurin, the interest rate is going up in the United States, and this makes it more attractive to invest there. Uduk said, “The essence of the e-dividend mandate management system is to eradicate or reduce to the barest minimum the incidence of unclaimed dividends. Unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market.
However, since the launch of the system in July 2015, the amount of unclaimed dividends appears not to be decreasing. Uduk, in a recent press briefing, revealed that the unclaimed dividends had reduced to N100bn as of September 2018. He noted that the investors were scared to come forward to regularise their shares for fear of prosecution.
He said, “The systems SEC has implemented is fair enough, but they are not doing enough in terms of stakeholder engagement. SEC has never called on any shareholder group or broker, registrar and the Central Securities Clearing System to have a joint meeting. The President, Institute of Capital Market Registrars, Mr Bayo Olugbemi, explained that the identification process that shareholders were made to go through was a necessity.
He said, “Up till today, we have issues of identity theft by falsification of records. If we do all that is expected of us, and one still defrauds us, it will be known that we have done our part, according to operations and procedures. The Afrinvest expert, Ebo, said as seamless as the e-dividend process might seem, there was a need for more co-ordination and a central platform for registrars, banks and brokers to upload the e-dividend mandate for effectiveness.
Uduk said, “We also protect investors through the National Investors Protection Fund Risk-Based supervision that enables us to supervise the operators to ensure that they do not do what they are not supposed to do. Uduk described the unclaimed dividends as a consequence of the bottlenecks inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, among others.
She noted that a lot of people bought shares in companies that were doing well and wanted to increase their holdings, which pushed them to use multiple and fictitious names. Uduk said, “This will, no doubt, grow investors’ confidence, improve the breadth and depth of the market in terms of product offerings, engender market integrity, and contribute to the country’s economic growth.
Wow... N129 in limbo. Why use false identity to buy stock if you made your wealth legally? One of the reason BVN implementations was frustrated in the last regime.
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