Following the recent directives by the capital market regulators concerning the verification and clearance of public offers, the Nigerian Stock Exchange (NSE), has announced the exemption of Rights Issues from the scrutiny of the regulatory authorities.

Speaking at its Annual General Meeting in Lagos on Friday, the Director-General of the NSE, Professor (Mrs.) Ndi-Okereke Onyiuke disclosed that this became necessary following the confusion trailing the legality or otherwise of sending Rights issues for clearance and verification. She said, “Rights issue is the prerogative of the existing shareholder of a company to either take or leave the shares been allotted to him. It is the right of the shareholder, as a result, it is exempted from the clearance of the Securities and Exchange Commission or the verification exercise of the Central Bank of Nigeria. (CBN).”

She commended the CBN for its efforts at reducing the delay associated with the conclusion of public offers, through its recent decision to suspend the verification exercise on the capital of banks and other companies until after the conclusion of the allotment process. As a result, she directed all companies and issuing houses to stop sending the list of subscribers to the CBN, but should, instead, send their allotment proposal within six weeks after the close of the offer as stipulated by SEC in its recent directives to market operators.
“The CBN has agreed to stop the capital verification exercise until after the allotment process. It decided that allotment should go on and if there is any case of suspected money laundering or terrorist financing only the suspected individual or transaction will be affected and it will be dealt with in that instance until it is cleared or apprehended. This is a welcome development as the long period of delays is now over,” she noted.

Concerning the Annual General Meeting, the President of the NSE, Mr. Oba Otudeko predicted that the market will be driven for the rest of the year by active portfolio management, increased foreign participation, inflows from pension funds and insurance companies. He noted that its performance since the beginning of the year is an indication of the buoyancy of the market and the growth opportunities inherent in it.

He said, “New issuance of bonds by the Federal Government would buoy activities in the primary market, even as we expect some banks and manufacturing companies to seek funds from the stock markets, adding to the mix of available instruments and further deepening the market.”

He stated that in August 2007, the NSE recorded a total transaction volume of 90.4 billion shares valued at N1.34 trillion compared with 20.8 billion shares valued at N273.2 billion recorded in 2006.
He noted that turnover ratio has increased to 19.5 per cent from 14.7 per cent in 2006.