Nigerian Exchange Limited (NGX or The Exchange) is pleased to announce that it has received approval for seven derivatives contracts from the Securities and Exchange Commission (SEC) on Monday, 28 June 2021.
The approved contracts are Access Bank Plc Stock Futures, Dangote Cement Plc Stock Futures, Guaranty Trust Bank Plc Stock Futures, MTN Nigeria Communications Plc Stock Futures, Zenith Bank Plc Stock Futures, NGX 30 Index Futures, and NGX Pension Index Futures.
This announcement follows the successful registration of NG Clearing by SEC, as a premier Central Counterparty, effective 7 June 2021. With these approvals, NGX is inching closer to launch West Africa’s first Exchange Traded Derivatives supported by NG Clearing in the risk management process.
Ahead of the launch of derivatives, the Chief Executive Officer, NGX, Mr. Temi Popoola, CFA, noted that “The launch of the derivatives market aligns with our commitment to building a market that thrives on innovation and responds to the needs of stakeholders in accessing and using capital. We are, therefore, excited about the prospects of deepening Africa’s position in the global financial markets through ETDs, as well as enhancing liquidity and mitigating against price, duration, and other financial risks that may arise from sophisticated financial transactional activities.”
Leading up to the launch of ETDs in the market, NGX has continued to ensure a widespread understanding of derivatives, its applicability, and how investors can reap maximum value from the asset class. NGX has collaborated with both local and international organisations such as SEC, JPMorgan Chase, CBOE Options Institute, and NG Clearing to facilitate in-depth capacity-building programs on the derivatives market. In addition, through its learning and development arm, X-Academy, NGX has hosted training programs to prepare capital market players who wish to undertake the Chartered Institute for Securities & Investment UK Global Derivatives qualification exam and is on track to host further training for other stakeholders in the near term.
A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset or group of assets. Common underlying instruments include bonds, commodities, currencies, interest rates, market indices, and stocks. The basic principle behind a derivative contract is to earn profits by speculating on the value of the underlying asset at a future date. As such, derivatives are used as a risk management instrument and are suited to both professional and private investors who wish to hedge an open position or gain exposure to assets and markets without necessarily holding the underlying assets. ?ETDs are variants of derivatives traded on an organised securities exchange as against those other derivatives traded through informal over-the-counter (OTC) markets.
NGX Lifts African Alliance, Royal Exchange Trading Suspension
The Nigerian Exchange Limited (NGX) has lifted the suspension placed on trading in shares of African Alliance Insurance Plc and Royal Exchange Plc following their failures to filed their audited financial statements for the year ended 31 December 2020 and unaudited financial statements for the quarter ended 31 March 2021.
The companies were among the four companies suspended on 2 July 2021. However, the suspension was lifted after the two companies filed their audited financial statements and unaudited financial statements as required. The other two companies are the Niger Insurance Plc and the Tourist Company of Nigeria Plc.
NGX disclosed in a statement published on its website.
The statement reads, “African Alliance Insurance Plc and Royal Exchange Plc, two (2) of the four (4) listed companies that were suspended on 2 July 2021, have now filed their Audited Financial Statements for the year ended 31 December 2020 and Unaudited Financial Statements for the quarter ended 31 March 2021.
“In view of the companies’ submission of these financial statements, and pursuant to Rule 3.3 of the Default Filing Rules, which states that; “The suspension of trading in the issuer’s securities shall be lifted upon submission of the relevant accounts provided The Exchange is satisfied that the accounts comply with all applicable rules of The Exchange. The Exchange shall thereafter also announce through the medium by which the public and the SEC was initially notified of the suspension, that the suspension has been lifted”, Trading License Holders and the Investing Public are hereby notified that the suspension placed on trading on the shares of African Alliance Insurance Plc and Royal Exchange Plc was lifted on Monday, 4 October 2021.”
Insider Dealing: Indimi Acquires an Additional 5.1 Billion Ordinary Shares Worth N3.3 Billion in Jaiz Bank Plc
Alhaji (Dr.) Muhammadu Indimi, the billionaire founder of Oriental Energy Resources, purchased additional shares of 5,076,923,077 in Jaiz Bank Plc, according to the statement published on the Nigerian Exchange Limited.
Indimi acquired the 5,076,923,077 ordinary shares at N0.65 per share, representing an investment of N3.3 billion or $8 million in the bank. The declaration is in line with the Nigerian Exchange Limited insider dealing disclosure instituted to enforce transparency across the Exchange.
The statement reads “Trading License Holders and the Investing Public are hereby notified that additional 5,076,923,077 ordinary shares of 50 kobo each of Jaiz Bank Plc (Jaiz Bank) were on Monday, 4 October 2021, listed on the Daily Official List of the Nigerian Exchange Limited (NGX).
“The additional shares listed on NGX arose from Jaiz Bank’s private placement of 5,076,923,077 ordinary shares of 50 kobo each to Alhaji (Dr.) Muhammadu Indimi at N0.65 per share.”
The billionaire previously owned 3,233,813,044 ordinary shares in the bank. He now holds 8,310,736,121 shares, representing 24.06 percent in the bank. Alhaji Indimi is Jaiz Bank’sAlhaji (Dr.) Muhammadu Indimi, the billionaire founder of Oriental Energy Resources, purchased additional shares of 5,076,923,077 in Jaiz Bank Plc, according to the statement published on the Nigerian Exchange Limited. largest shareholder.
On Monday 4, October 2021, Jaiz Bank listed the 5,076,923,077 on the Nigerian Exchange Limited (NGX). With the listing, the bank’s total issued and fully paid-up shares has now increased to 34,541,172,377 ordinary shares of 50 kobo each, up from 29,464,249,300.
Indimi is the founder and chairman of Oriental Energy Resources, a Nigerian oil exploration and production firm established in 1990.
Airtel Nigeria to BuyBack N61.24 Billion Worth of Shares
Airtel Africa, a leading provider of telecommunications and mobile money services, with offices in 14 nations across Africa, on Monday announced that its subsidiary Airtel Networks Limited (‘Airtel Nigeria’), a leading provider of telecommunications services in Nigeria, has initiated a process under which it seeks to buy back the 8.27 percent minority shareholdings at an offer price of N55.81 per share.
The company disclosed in a statement filed with the Nigerian Exchange Limited and seen by Investors King.
According to the statement if all holders agreed to sell their shares, the total buy back is estimated at N61.24 billion (c$148.1mn using an exchange rate of 413.38 NGN/USD).
Therefore, the telecommunication giant, disclosed that this represents an open offer to all shareholders.
A share buyback or repurchase is the re-acquisition by a company of its own shares. It represents an alternate and more flexible way of returning money to shareholders.
Share buyback sends a positive signal as the company is investing in its own shares because it is positive about its own future prospects.
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