Financial Vanguard

Page 1

MAY 28, 2012

D

espite recent reduction in the initial listing and annual listing fees by the Nigerian Stock Exchange (NSE), investigations by Financial Vanguard have revealed that the NSE still remains the costliest stock exchange in the emerging markets. Apart from charging the highest fees at the point of listing from prospective companies wishing to access the market, both the annual listing fees and costs to investors on transactions done on the floor of the exchange are sky high. Financial Vanguard survey also revealed that major exchanges across Africa, namely, Cairo Stock Exchange (CSE), Johannesburg Stock Exchange (JSE), and Nairobi Stock Exchange (NSE), have all introduced compelling incentives to entice upstart companies that might want to access the market following the crippling global financial meltdown. They have either exempted or are in the process of exempting upstart companies from any form of listing fees, while transactions in some products attract nil costs for investors. For instance, the Egyptian Stock Exchange (EGX) had some months ago, while opening a new Headquarter of the exchange in Cairo announced an initial listing fee exemption for new entrants in the market to allow for fresh listings. JSE on its own has since eliminated cost on single Futures and Options to encourage liquidity providers and retail investors to continue to patronize the market. The argument in some quarters in Nigeria has always been that costs constitute impediment to companies wishing to list their shares, while already listed ones are looking for excuses to delist from the exchange. Just last year, 2011, three companiesNigeria Bottling Company (NBC), Nampak Plc and United Textile Nigeria Plc, voluntarily exited the market, while a couple of others were compulsorily delisted for various offences. Calls have repeatedly gone out for significant reduction in charges in the stock market Comparative analysis of NSE’s charges against other African markets Available data obtained by Vanguard shows that for companies wishing to

Excessive charges scare companies away from Nigerian stock market …. Operator suggests further reduction in transaction cost BY NKIRUKA NNOROM list in the Main Board, the Nigerian Stock Exchange charges initial listing fee of 0.3 per cent of the total market capitalisation of a prospective company, subject to minimum of N1,889,99.06 and maximum of N4,200,000.24; Nairobi Stock Exchange’s charges stand at 0.06 per cent of the company’s capitalisation, subject to minimum of N375,967.32 and maximum of N2,819,750.16, while

JSE charges 0.04 per cent, subject to minimum of N20,751.72 and maximum of N4,301,216.62. For listing in Alternative Investment Market segment, the Nigerian Stock Exchange takes flat fee of N300,000.00 (three hundred thousand), the company ’s capitalization notwithstanding. In Nairobi Stock Exchange, the fee still remains constant at 0.06 per cent of total market capitalisation, subject to minimum of N187, 983.66 and maximum of N1, 879,833.44, JSE charges a minimum

DAILY MOVEMENT IN NIGERIA’S FOREIGN RESERVES Date 5/22/2012 5/21/2012 5/18/2012 5/17/2012 5/16/2012 5/15/2012 5/14/2012 5/11/2012 5/10/2012 5/9/2012 5/8/2012 5/7/2012 5/4/2012 5/3/2012 5/2/2012 4/30/2012 4/27/2012 4/26/2012 4/25/2012 4/24/2012 4/23/2012 4/20/2012 4/19/2012 4/18/2012 4/17/2012 4/16/2012 4/13/2012 4/12/2012 4/11/2012 4/10/2012 4/5/2012

Gross 37,482,285,499 37,439,170,782 37,285,969,561 37,223,665,352 37,151,633,303 37,072,040,732 37,023,607,843 36,892,907,379 36,850,285,379 36,804,250,607 36,758,001,914 36,705,657,293 36,784,924,268 36,748,282,561 36,706,773,997 36,662,898,674 36,520,294,186 36,479,237,302 36,438,301,655 36,396,777,660 36,349,254,227 36,215,165,105 36,184,222,371 36,151,354,539 36,150,452,788 36,142,314,856 36,087,494,507 36,048,849,506 36,008,626,785 35,969,437,141 35,836,544,099

Liquid 36,079,146,052 36,034,598,455 35,877,638,791 35,814,050,282 35,740,840,036 35,659,929,110 35,610,330,750 35,478,408,155 35,435,615,533 35,389,060,533 35,342,317,635 35,289,611,852 35,368,246,187 35,331,002,442 35,288,932,829 35,244,387,671 35,099,101,308 35,057,100,259 35,015,170,490 34,972,574,691 34,924,243,582 34,787,716,772 34,755,571,489 34,721,459,513 34,719,314,771 34,710,274,565 34,653,013,057 34,613,620,983 34,572,548,590 34,532,456,497 34,394,416,247

Blocked 1,403,139,447 1,404,572,327 1,408,330,770 1,409,615,070 1,410,793,267 1,412,111,622 1,413,277,093 1,414,499,224 1,414,669,846 1,415,190,074 1,415,684,279 1,416,045,440 1,416,678,081 1,417,280,118 1,417,841,169 1,418,511,003 1,421,192,878 1,422,137,042 1,423,131,165 1,424,202,969 1,425,010,646 1,427,448,332 1,428,650,882 1,429,895,027 1,431,138,017 1,432,040,290 1,434,481,450 1,435,228,523 1,436,078,195 1,436,980,644 1,442,127,852

% 3.75% 3.76% 3.78% 3.79% 3.80% 3.81% 3.82% 3.84% 3.84% 3.85% 3.86% 3.86% 3.86% 3.86% 3.87% 3.87% 3.90% 3.90% 3.91% 3.92% 3.93% 3.95% 3.95% 3.96% 3.96% 3.97% 3.98% 3.99% 3.99% 4.00% 4.03%

of N2,668.62 and maximum of N501,206.02. In Nigeria, annual listing fee for companies in the Main Board attracts 0.3 per cent charges up to maximum of N4, 200,000.24. For companies listed in the same sector in Nairobi, the exchange charges 0.06 per cent (subject to minimum of N375, 9678.32 and maximum of N2, 819,750.16). For Johannesburg Stock Exchange, companies in the Main Board are expected to pay 0.04 per cent of their capitalisation (subject to minimum of N680,047.08 and maximum of N3,456,332.16) for ordinary shares, while preference Continues on page 18

166.10

-0.80

2,094.00

-11.00

19.64

+0.06

106.89 +0.34

CURRENCY BUYING CENTRAL SELLING CFA 0.2817 KRONER 26.5721 EURO 197.5055 POUNDS 244.5343 RIYAL 41.2489 SDR 236.1186 FRANC 164.3472 DOLLAR 154.7 WAUA 235.6595 YEN 1.9364 RENMINBI 24.4642

0.2917 26.658 198.1439 245.3247 41.3823 236.8818 164.8784 155.2 236.4212 1.9427 24.5437

0.3017 26.7438 198.7822 246.115 41.5156 237.6449 165.4095 155.7 237.1828 1.9489 24.6232

CBN Exchange rate as at 25/05/2012 C M Y K


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