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Shareholders to Access N100b Unclaimed Dividends

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Egypt Stocks
  • Shareholders to Access N100b Unclaimed Dividends

Shareholders can now reclaim their unclaimed dividends within two days of providing their validated bank account to the company registrar.

Th value of unclaimed dividend is estimated to be in the region of N100 billion.

In a major move to tackle the menace of unclaimed dividends headlong, Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), is reviewing new rules and guidelines to make it easier for shareholders to mandate their accounts for automated, electronic-dividend payment, while blocking loopholes being exploited to create unnecessary delay in the account-mandating process.

Under the new rules, registrars “shall ensure that all mandated shareholder accounts are credited with all outstanding unclaimed dividends within two days”, while Bank Verification Number (BVN) shall be acceptable in replacement for banker’s confirmation of signature.

Accordingly, where BVN is provided, banker’s confirmation shall not be required before shareholders’ accounts are mandated by the registrars, thus avoiding unnecessary delay in mandating shareholders’ accounts.

Registrars are also expected to submit a quarterly report on all mandated shareholders’ accounts to SEC in order to enable the Commission monitor the level of compliance with the e-Dividend Mandate Management System (eDMMS).

At the last count, there were more than 2.55 million mandated accounts under the eDMMS. However, there have been several complaints of registrars not remitting the backlog of unclaimed dividends and in many instances, shareholders have to launch a new separate recovery process to reclaim previous payments.

The new rules and amendments, SEC said, are part of efforts to increase the rate of compliance by registrars, reduce the quantum of unclaimed dividends and avoid unnecessary delay in mandating shareholders’ accounts.

According to the rules, any registrar that violates the provisions of the new rules shall be liable to a penalty of not less than N1 million and an additional sum of N20, 000 for every day the violation persists.

SEC said it stipulates the penalty to serve as a deterrent to registrars who may possibly violate the rule.

Also, as part of efforts to ensure that shareholders and their heirs receive the benefit of their investments at the stock market, SEC is reviewing rules and regulations for the transfer of shares of a deceased person to the beneficiaries or administrators.

Under the new rules, registrar shall ensure that shares of a deceased are transmitted within three weeks of receiving the request from the administrators or executors. The executors or administrators shall however, provide letter of introduction from the administrators and executors, introducing themselves as the legal representatives of the estate. The letter should indicate the names, addresses, signatures and BVNs of the individual administrators and executors.

Also, administrators or executors shall provide original death certificate from the National Population Commission (NPC) for sighting, original probate letter or letter of administration for sighting or the certified true copy (CTC) from a Notary Public, copy of newspaper advert placed by the Court or Gazette, any evidence of ownership of the investment by the deceased such as the statement of shareholding from the Central Securities Clearing System (CSCS), original share certificates, dividend stub or dividend warrants or bank statement showing receipt of dividend into the account of the deceased.

Where the administrator or executor cannot provide the above requirements, the registrar may require confirmation through insurance, indemnity or interview.

SEC is also limiting the fees chargeable for transmission of shares by registrars to one per cent of the total value and additional five per cent Value Added Tax (VAT) for shares of N5million and below and 0.5 per cent of the value and five per cent VAT on shares above N5million with a maximum chargeable amount of N200,000, excluding VAT. Also, fees chargeable for confirmation of probate or letter of administration shall not exceed N12,000.

Sources in the know at the weekend said the new rules will be part of discussions at a crucial meeting of capital market regulators and operators this week. The Capital Market Committee (CMC) meeting, the first in 2019, is scheduled for Thursday in Lagos.

At the meeting, the CMC will consider reports from many of its technical committees and review the outlook for the Nigerian capital market in the light of emerging developments. During the meeting, issues bordering on implementation of the 10-year capital market master plan as well as others relating to the capital market and the economy would be discussed and the outcome made known to the media.

The CMC, chaired by SEC Director General, consists of chief executives of all registered capital market operators, including stockbrokers, solicitors, custodians, fund managers, issuing houses, rating agencies, registrars, reporting accountants, trustees and consultants among others. Other members include chief executives of the Chartered Institute of Stockbrokers (CIS); Nigerian Stock Exchange (NSE), Abuja Securities and Commodity Exchange (ASCE) and Central Securities Clearing System (CSCS).

The CMC also include two members each from observer groups, which include Asset Management Corporation of Nigeria (AMCON), Central Bank of Nigeria (CBN), Corporate Affairs Commission (CAC), Debt Management Office (DMO), Federal Ministry of Finance, Federal Mortgage Bank of Nigeria (FMBN), Federal Inland Revenue Service (FIRS), the Nigerian Deposit Insurance Corporation (NDIC), Investment and Securities Tribunal (IST), the Nigerian Investment Promotion Council (NIPC), National Insurance Commission (Naicom), National Pension Commission (Pencom) and FSS2020.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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Finance

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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Finance

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

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Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website: www.gtlregistrars.com, complete and submit to the Registrar or their respective Banks.

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