The Managing Director/Chief Executive Officer, NASD Plc, Bola Ajomale, has said the full operation of the NASD Enterprise Portal this year will significantly deepen the reach and contribution of the capital market to the nation’s growth.
The NASD is the promoter of a trading network that eases secondary market trading of all securities of unquoted public companies in Nigeria.
Ajomale said the recession of 2016/2017, the depletion of forex reserves and high interest rate regime had a direct and profound impact on the operators of the NASD.
“High-yield gilt-edged securities presented a more rewarding and less risky alternative to investors who otherwise would have considered investing in NASD OTC stocks. Underlying companies for most of the stocks admitted to trade on NASD were also under profit pressure due to weak consumer spending amid rising operational costs,” he said at the company’s Annual General Meeting in Lagos.
The Chairman, Board of Directors, NASD Plc, Olutola Mobolurin, said the company secured the approval of SEC last year to create and manage the NASD Enterprise Portal in line with its commitment to developing investments complementary to the advancement and development of the market to serve the peculiar needs of the Nigerian economy.
He said the portal, which was launched in April 2018, would function as a repository for collating information on the performance, operations and investment opportunities available in qualified enterprises.
He said the NASD also embarked on the reconfiguration of its proprietary Bilateral Interdealer Trading System platform, adding that “it is expected that the transition from the present leased platform to the BITS will greatly reduce trading platform, which was the highest annual expense incurred by the company since 2013.”
According to Mobolurin, trading activity reduced in 2017 as the number of trades executed on the NASD OTC market decreased by 42.68 per cent over the previous year.
He said the market saw a 3.13 per cent increase in the number of admitted securities, 6.42 per cent increase in authorised traders and 5.83 per cent in participating institutions.
The chairman said the NASD admitted five new securities to close with 34 securities and traded bonds worth N12.08bn.
He said, “The volume of shares traded during the year increased by 20 per cent, while the value added declined marginally by 0.08 per cent, compared to the previous year. As of December 31, 2017, the value of transactions executed on the market was N4.36bn.”
Mobolurin said the company’s direct trading expense in the year under review reduced to N63m from N82.4m in the preceding year as a result of the renegotiation of the lease payment to the Nigerian Stock Exchange for the use of its trading platform and the conscious effort to reduce cost generally.
“The lease payment to the NSE for the use of its trading platform is the highest singular expenditure item for the company,” he added.
The chairman stated that the board had considered the use of an alternative trading platform, which could align costs with the current slow pace of the development of the market.
He said, “It is anticipated that the reawakening of economic activities which is expected to be sustained in 2018 will buoy market activities as this will increase the performance of many businesses in the OTC market space and re-ignite investor interest.”
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