Nigeria’s NSE in bid to deepen lending pool
17 January 2020 Nigeria
Image: Shutterstock
The Nigerian Stock Exchange (NSE) has confirmed it is working with the country’s National Pension Commission and the Asset Management Corporation of Nigeria to further develop its securities lending market.
In its first securities lending report of 2020, the exchange says it has begun the year with 20.78 million shares on pledge available for lending.
The shares are available across 10 exchange members including several commodities firms. The entities with the most share available include Guaranty Trust Bank with 8.44 million shares and Presco, an agricultural manufacturer specialising in palm oil plantations.
As of October 2019, the country’s securities lending market was valued by the NSE at NGN1.07 billion (US$2.96 million) and has five licenced lending agents.
Data obtained from the NSE on their historical securities lending and borrowing transactions report showed 61,435 transactions were made throughout 2019.
The update for available securities comes almost exactly a year after new guidelines on securities lending from the NSE came into effect. In 2017, the exchange updated its original guidelines that were first published in 2012 and these were then accepted by the Nigerian Securities and Exchange Commission in 2018, with a delayed implementation date of 7 January 2019.
The most consequential amendments include changes to reporting and collateral rules and edits to the wording of the recommended Global Master Securities Lending Agreement.
In its annual round-up report for 2019, the NSE said securities lending played an important role in the capital market by providing liquidity, which in turn reduced the cost of trading and promoted price discovery.
In its first securities lending report of 2020, the exchange says it has begun the year with 20.78 million shares on pledge available for lending.
The shares are available across 10 exchange members including several commodities firms. The entities with the most share available include Guaranty Trust Bank with 8.44 million shares and Presco, an agricultural manufacturer specialising in palm oil plantations.
As of October 2019, the country’s securities lending market was valued by the NSE at NGN1.07 billion (US$2.96 million) and has five licenced lending agents.
Data obtained from the NSE on their historical securities lending and borrowing transactions report showed 61,435 transactions were made throughout 2019.
The update for available securities comes almost exactly a year after new guidelines on securities lending from the NSE came into effect. In 2017, the exchange updated its original guidelines that were first published in 2012 and these were then accepted by the Nigerian Securities and Exchange Commission in 2018, with a delayed implementation date of 7 January 2019.
The most consequential amendments include changes to reporting and collateral rules and edits to the wording of the recommended Global Master Securities Lending Agreement.
In its annual round-up report for 2019, the NSE said securities lending played an important role in the capital market by providing liquidity, which in turn reduced the cost of trading and promoted price discovery.
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