Nigerian Exchange (NGX) Limited at a webinar, alongside Securities and Exchange Commission (SEC), Chapel Hill Denham Securities Limited, Central Securities and Clearing System, and the Association of Securities Dealing Houses of Nigeria (ASHON), enlighten investors on trading rights in Secondary Markets.
In his opening remarks at the event with the theme; ‘Trading Rights: What Every Investor Needs to Know, the Acting Chief Executive Officer of NGX, Mr. Jude Chiemeka said the event was one of the Exchange’s Investor education series initiatives.
He noted that the webinar is apt and timely given recent developments in Nigeria’s financial market space.
“As we may be aware the apex bank (CBN) has mandated Banks to recapitalize their operations. This recapitalization will result in the emergence of stronger, healthier, and more resilient banks thereby supporting the achievement of a $1 trillion economy by the year 2030.
“Bigger banks with larger capital base and capacities can underwrite larger levels of credit, thereby providing a pathway to the revitalization of the economy,” he stated.
According to Chiemeka, NGX as the foremost platform for capital formation in Africa is properly positioned to provide the necessary support to market operators, banks, and the government to achieve set goals.
“Our history as an Exchange gives credence to our novel contribution to the success of the banking sector recapitalization over 20 years ago (in 2004) which has been one of the major pivots for a stable financial system in Nigeria.”
He pointed out that the Exchange through first-in-class bespoke technology is well poised to support this cycle of capital raised by Banks and other issuers/listed companies in diverse sectors as they fall through.
He said “Data from KPMG estimates that within the 2024 -2026 window for the Banking Recapitalization exercise an aggregate of over N4.2 trillion in fresh capital injection is required to satisfy the new capital requirement across all types and classes of Banks.
“Right issues are one of the preferred means by which they would be seeking new capital injection to fulfill the apex Bank’s requirement.
“Other listed Companies in other sectors have also been quite active, YTD total right issues prints at N 3.6 billion. Hence the reason for this all-important webinar.”
On his part, Executive Commissioner, Operation, Securities and Exchange Commission (SEC), Mr. Bola Ajomale commends the NGX for organizing this webinar at this time when over N4 trillion fresh capital injection is required to satisfy the new capital requirement across all types and classes of Banks. The capital raising might go through the right issues process. Out of the six capital raised in the market this year, four are right issues.
Consequently, as the apex regulator, the SEC will continue to support all efforts aimed at making our markets fairer, more efficient, and more transparent, particularly in the areas of regulation and technology.”
In his remarks, Managing Director of NG Clearing Limited, Mr. Farooq Oreagba, emphasised the significance of the webinar as a distinctive platform for enhancing investors’ understanding of rights issues. He highlighted key aspects such as options available to investors during right issuances, the process of trading rights, and the settlement procedures.
He also said “With the webinar, investors would be well armed with the right information and resources to navigate the market as we expect a flurry of Rights issues to hit the market soon.
The Managing Director, Chapel Hill Denham Securities Limited, Mr. Akeem Shadare did a presentation and highlighted that companies use rights issues to raise capital, often to pay down debt or fund expansion. Shareholders can benefit from capital gains if the company uses the extra funds wisely. Since more shares are issued, the stock price may be diluted and likely decrease.
Other speakers at the webinar include Mrs. Onome Komolafe, Divisional Head, Business Services and Client Experience; Dr. (Mrs.) Catherine Nwosu, Managing Director, Africa Prudential Plc; Mr. Abimbola Babalola, Head, Trading & Products, Nigerian Exchange Limited.
The Exchange remains highly invested in providing an efficient, liquid, and transparent market for investors and businesses in Africa, to access capital and build wealth.