The shares of Nigerian Stock Exchange Group (NGX Group) have begun to provide liquidity for shareholders following its listing on the NASD OTC. The company, formerly known as the Nigerian Stock Exchange (NSE) was demutualised in March. Following the demutualisation, NGX distributed 1,964,115,918 ordinary shares of 50 kobo each to over 200 dealing members and additional Ordinary members, who have now become shareholders.
Trading data obtained from the NASD Plc showed that investors traded 64.582 million shares of NGX Group valued at N1.230 billion last week. Some stockbrokers said the trading of the shares on NASD Plc platform was a good development as it provides the opportunity to make money from their shares.
The Managing Director of NASD Plc, Mr. Bola Ajomale, had said in line with regulatory rules and in support of enabling liquidity in the market, NASD OTC provides the perfect landing platform for the 60-year-old company that has spent approximately 10 years in its demutualisation exercise.
“NASD provides an orderly, lightly regulated and transparent environment with structure and experienced traders. The market delivers on the basis of easy onboarding and withdrawal of securities into and out-of-the market space and the code for NGX – SDNGXGROUP was created at the depository within a 48-hour period. We are pleased to be able to do our part in deepening the capital market by expressing our mandate of creating liquidity transparently,” Ajomale said.
Also speaking, the Head of Operations and IT at NASD Plc, Ms. Chinwe Ekeh, there are two methods of entry into the OTC market as an Issuer.
“The first is an admission of company which is akin to a full listing while the second is an admission of security where individual shareholders can indicate an interest to trade the shares. NGX shares were introduced into the market under the latter arrangement by Icon Stockbrokers Limited who advised an opening price of N25 per share.
Also speaking Head of Depository Services in CSCS, Yahaya Babangida, advised that all beneficiaries of the demutualised entity have been credited either directly into their own Trading accounts or an escrow account under the registrars.
In the same vein, Head, Clearing and Settlement Operations CSCS, Mr.Folagbade Adeyemi , noted that the inter member process, which is the transfer of account process, enables an investor to move their trading account from one dealing participant to another. This is a KYC driven process, the investor moves their account from the resident broker to the target broker. Once KYC document is completed and due diligence done transfer and trade can be done by the preferred broker,” he said.