Stock market halts weekly rally by 2.57% loss
The proposed plan by the Federal Government to manage unclaimed dividends, which is projected to hit N200 billion by the end of this year, has drawn the ire of capital market operators on the adverse effects on investor confidence and future growth of the market.
This is just as the NSE All-Share Index and Market Capitalisation depreciated by 2.57 per cent to close the week at 34,136.82 and N17.838 trillion respectively.
Similarly, all other indices finished lower with the exception of NSE Insurance Index which appreciated by 0.51 per cent while the NSE ASeM Index closed flat.
Perhaps, as one its options to fund the economy, the Federal Government has in Section 39 of the 2020 Finance Act proposed that unclaimed dividends of less than 12 years be managed on behalf shareholders through Unclaimed Dividend Trust Fund while after 12 years, the money becomes forfeited to the government as perpetual debt to shareholders.
Addressing the Investigative Arm of House Committee on Capital Market and Institutions recently, the Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Onyenwechukwu Ezeagu, explained that capital market regulators and operators had leveraged technology to put in place many initiatives to address the issue of unclaimed dividends.
According to him, the initiatives include Dematerialisation of shares, which entails upload of quoted companies’ shares in the Central Securities Clearing System (CSCS) for ease of reconciliation, adoption of E-Dividend and E-Mandate, consolidation of multiple accounts, identity management engagements, introduction of electronic Initial Public offering (e-IPO), adoption of Minimum Operating Standards (MOS) for operators to enhance efficiency, intensify investor education, continuous stakeholders’ engagements, process reform and streamlining and KYC update on clients’ accounts among others. “Generally, the incentives for savers and capital providers in the capital market is the expectation of dividends and capital appreciation. It is, therefore, our considered view that