- SEC Extends Recapitalisation Deadline
Again, the Securities and Exchange Commission (SEC) has announced the extension of the deadline for market operators to comply with the minimum capital requirement by three months, from the initial December 31, 2016. This means that operators have till March 31st to increase their capital base.
The extension followed a plea by stockbrokers, who had requested additional six months to enable them comply successfully. The fact that the market regulator keeps pushing forward the deadline is indicative of the extent of illiquidity in the market, which is characterised by economic meltdown and dwindling purchasing power of the masses, thereby making investment in stocks unattractive.
But full compliance of the Minimum Operating Standards (MOS) for dealing members would help the market to develop robust controls; strong governance framework and effective human capital. This will enable them achieve best-in-class operations in order to compete on a global level for the benefit of investors and the capital market.
SEC, Nigeria’s apex capital market regulator had, last year, granted an extended window of 15 months to December 30, 2016, from the initial September 30, 2015 deadline to capital market operators that failed to meet the initial recapitalisation deadline to comply with the new minimum capital requirements for their functions.
The Commission had in December 2013, announced major increases in minimum capital requirements for capital market functions under a new minimum capital structure that was initially scheduled to take off by January 1, 2015. It however extended the deadline to September 30, 2015.
A breakdown of the new recapitalisation requirements are as follows:
Broker/dealer from N70 million to N300 million – 329 per cent rise;
Broker from N40 million to N200 million – 400 per cent;
Dealer N30 million to N100 million – 233 per cent;
Issuing houses N150 million to N200 million;
Underwriter N100 million to N200 million – 100 per cent; Trustees N40 million to N300 million; Rating agencies, and portfolio and fund managers N20 million to N150 million – 650 per cent respectively;Registrar N50 million to N150 million;Corporate investment adviser unchanged at N5 million, and; Individual investment advisers N500,000 to N2 million – 300 per cent.
The new Executive Committee, Association of Stockbroking Houses of Nigeria (ASHON), led by its Chairman, Patrick Ezeagu, during a courtesy call to the Commission last week, had solicited for the grace period for the recapitalisation to be extended by six months.
But the Director General, SEC, Mounir Gwarzo, granted the Association’s request by extending the recapitalisation exercise by three months.He restated the Commission’s resolve to promote the development of Commodity Exchanges in the country, noting it is willing to support the Lagos Commodities & Futures Exchange being midwifed by ASHON.
Gwarzo insisted on the three months extension, aligning with their argument that stockbrokers carry equities in their balance sheet and prices of equities have gone down thus affecting their capital
The Group also noted with concern the proposed amendment of Rule 56(1) – Function of Brokers (Harmonisation of Registration requirement for incidental functions). According to them:“The development will preclude brokers from providing Investment advice to their clients/Public.”
ASHON, while acknowledging not knowing the thinking behind the proposed amendment, solicited for the reconsideration of the proposal. The call is based on the backdrop of the so called value addition provided by brokers/dealers in providing investment advice to their clients.
They argued that “a lot of stock broking houses had well established research desks that not only help to broadcast market information on a continuous basis, but also carry out in-depth analysis and provide opinions to complex financial issues to their clients.”
The Association also expressed their dismay over the Federal Government’s sole reliance and emphasis on monetary policy for macroeconomic management to the detriment of the capital market, while accepting to look at the Investment and Securities Tribunal (IST) funding proposal being championed by SEC and NSE.
Nigeria Corporations Paid N238.1 Billion Income Tax Via E-channels in 2020
Companies in Nigeria have started embracing electronic payment platforms established to ease the tax payment process and facilitate accountability.
According to the National Bureau of Statistics (NBS), businesses operating in Nigeria paid the highest amount of taxes through electronic channels in five years in 2020.
The statistics office puts the total amount paid in Company Income Tax (CIT) through the electronic channels at N238.1 billion in 2020.
The amount represents 16.9 percent of the total CIT paid in 2020 as more businesses adopt safer online payment methods.
NBS noted that payments were done through E-transact, E-tax pay and Remita.
However, a further breakdown of the report showed taxes fell by 13.5 percent from N1.63 trillion in 2019 to 1.41 trillion in 2020 due to the lockdown that crippled business activities in the first half of the year.
Taxes paid by Nigerian owned companies declined by 2.78 percent from N813.17 billion in 2019 to N790.58 billion in 2020. While taxes paid by international companies declined from N615.52 billion achieved in 2019 to N388.77 billion in 2020.
Aliko Dangote Remains Africa’s Richest Man With $12.1 Billion Net Worth -Forbes
Nigerian industrialist, Aliko Dangote, is Africa’s richest person for the tenth year in a row.
In the Forbes Africa latest billionaires list, Dangote’s total net worth stood at $12.1 billion, a $2 billion increment when compared to last year. Thanks to the 30 percent increase in the price of Dangote Cement share.
Nassef Sawiris of Egypt followed Dangote with $8.5 billion net worth with the majority of his investments coming from construction and other investments.
In third place was Nicky Oppenheimer of South Africa with an $8 billion total net worth.
Portland Paints, Chemical and Allied Products Plc Agreed to Merge
Portland Paints and Products Nigeria Plc and Chemical and Allied Products Plc have agreed to merge, according to the latest statement from both companies.
In a statement released through the Nigerian Stock Exchange, the Board of Directors of CAP said we are “pleased to inform you that following discussions and negotiations, the Boards of CAP and Portland Paints have reached an agreement to undertake a merger between both entities (the “Merger” or the “Proposed Merger”).
Accordingly, we “hereby present to you the terms and benefits of the Proposed Merger for your consideration and seek your support and approval to effect the Proposed Merger.
“The Proposed Merger presents a compelling opportunity to create significant value for shareholders of CAP and achieve the company’s strategic growth objectives as a larger company with a broader product portfolio, more corporate owned brands and diversified revenues.
“The resultant entity is also expected to benefit from enhanced distribution capabilities in addition to economies of scale and operational efficiencies.”
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