STL Trustees Capital Market & Money Market News Recap

While you were away!

SEC PROVIDES TEMPORARY PLATFORM TO FACILITATE E-DIVIDEND REGISTRATION EXERCISE

The Securities and Exchange Commission (SEC), has published a portal where investors in equities can search for their dividend status.

In a press release dated Thursday 13^th April, 2017, the Commission stated that the portal has been provided as part of measures to curb the growth of unclaimed dividend in the Nigerian capital market.  SEC, therefore, invites Members of the investing public to ascertain their registration status by clicking the link below;

Unregistered Investors for e-Dividend

Other excerpts of the press release:

“All investors, whose name(s) appear, are advised to URGENTLY contact the nearest branch of their Bank or Registrar to register for the collection of their unclaimed dividends and subsequent dividends electronically, as well as for the proceeds from their secondary market transactions to be credited to their preferred Bank Account (Direct Cash Settlement).

The Commission also wishes to remind the investing public on the deadline of 30^thJune, 2017, which will mark the end of issuance of physical dividend warrant, with a view to mitigating the risks associated with physical dividend warrants and improving investors’ experience.

Furthermore, the 30^th June, 2017 deadline will see the end of free registration of e-dividend, being bank-rolled by the Commission since the inception of the exercise in November 2015. Hence, members of the investing public are encouraged to urgently key into the on-going free registration”.

FEDERAL GOVERNMENT POSTPONES ISSUANCE OF GREEN BONDS UNTIL 2017 BUDGET IS PASSED

The Federal Government has revealed that it will delay the issuance of the proposed green bond until the 2017 budget has been passed. This was stated by the Minister of State for Environment Ibrahim Usman Jibril on Wednesday 12^th April, 2017, after a cabinet meeting.

In the words of Ibrahim Usman Jibril, “all is set for its formal launch but the budget has to be passed first before the issuance.”

The government had planned to launch the 20 billion naira ($65.55 million) bond in April 2017 to fund projects to reduce carbon emissions and develop renewable energy.

Announcing the plans in February, the environment ministry said the programme was aimed at widening Nigeria’s funding options and diversify the OPEC member’s oil-dependent economy, which is the largest in Africa.

The budget which is the determining factor for the Green Bond Issuance was first presented to lawmakers by President Muhammadu Buhari in December, and it must be agreed to by the lawmakers before it can be signed into law by the President.

 CBN INCREASES BORROWING CAP OF COMMERCIAL BANKS TO 125% OF SHAREHOLDERS’ FUNDS

The Central Bank of Nigeria, on Thursday 13^th April 2017, increased the cap on foreign borrowings available to commercial banks from 75% to 125%, according to reports from Reuters. According to the CBN, this decision became necessary due to the recent fall in the naira. As a result, some commercial banks had inadvertently surpassed the earlier prevailing 75% cap.

The CBN also noted that the sharp falls in the currency has caused lenders to see their dollar loan books swell in naira terms. This, in turn, means that they have to hold more capital in order to keep within a regulatory threshold of the loan to capital ratio.

“To address this development … the aggregate foreign currency borrowing of a bank borrowing should not exceed 125 percent of shareholders’ funds.” Reuters quotes the CBN circular as saying. Aside from the cap, however, the CBN released other guidelines on foreign borrowing.

For instance, it now prescribes that all foreign borrowing should be hedged through the financial markets and debt should have a minimum of five-year maturity except for trade lines, while lenders are required to report their utilization of foreign currency borrowings on a monthly basis.

The CBN has been trying to curb pressures on the naira from excess demand for dollars. It also wants to help avoid widespread capital raises for the banking industry given the weak equity markets and expensive debt market yields.

NSE REVEALS PLANS TO RESTRUCTURE FRAMEWORK ON TRADING OF LISTED REITS AND CLOSED END FUNDS

The Nigeria Stock Exchange (NSE) has notified the public about its proposed changes to the framework regarding the trading of Real Esta te Investment Trusts (REITs); Closed End Funds listed on The Exchange.

In a circular released on Wednesday, April 12^th, 2017, the NSE disclosed that the proposed changes, which will be implemented over the next three (3) quarters of 2017 are aimed at promoting transparency, disclosure, visibility and liquidity of listed REITs and Closed End Funds in the Stock Market. The changes will also make it easier for existing and potential investors to access information required to make investment decisions thereby contributing to the growth of these products in the stock market.

The proposed changes are as follows:

1. Rules: Specific rules relating to REITs and Closed End Funds are to be incorporated into the Rulebook of The Exchange.
2. Periodic Disclosure: REITs and Closed End Funds listed on The Exchange are to submit quarterly financials and audited full year financial statements to The Exchange via the NSE X-Issuer Portal. The financials will be accessible to the public via the NSE’s website and other NSE platforms.
3. Key Performance Metrics: REITs and Closed End Funds listed on The Exchange are to submit on a weekly basis, key performance metrics (as applicable) to the NSE which will be accessible via the NSE’s website. In addition, the Fund Managers will be required to post the information on their website. The information to be provided will include:

• Net Asset Value (NAV),
• Number of properties,
• Property type/distribution,
• Occupancy rates,
• Delinquency rates on rents,
• Average Property age,
• Any other relevant information.
• The prescribed submission format will be communicated to the Issuers/Fund Managers in due course.

1. Reclassification: REITs and Closed End Funds listed on The Exchange will be reclassified from the Main Board to a separate board specially created for REITs and Closed End Funds under the Equities Market.

Further to the proposed changes above, The Exchange is planning to host the first REITs Workshop before the end of the second quarter of 2017, to further engage with the relevant stakeholders within the market, on the proposed developments.

Closed-end funds are mutual funds with a limited number of shares from inception, while a REIT combines contributions from individuals and invests in real estate.

 DOLLAR EXCHANGE RATE REPORT 1^st APRIL TO 21^st APRIL, 2017

This report is a compilation of the dollar exchange rate at the official and parallel market from the 1^st of April to the 21^st of April, 2017.  The quoted parallel market prices are to serve as a guide to readers, as they represent the average price obtained daily from different black market dealers in the Country.