SEC, SON develop standards for Nigeria’s commodities market

• As Commission restrategises on delisting
• Market capitilisation loses N7 billion

The Securities and Exchange Commission (SEC) said it is partnering the Standard Organisation of Nigeria (SON) to develop standards that would make the nation’s agricultural commodities more acceptable in the international market and generate foreign exchange (forex).

Director-General of the SEC, Lamido Yuguda, said Nigeria has various commodities that could be exported to grow the economy, create more jobs and generate forex.

This comes as profit-taking continues at the capital market, trimming the capitalisation by as much as N7 billion at the close of yesterday’s trading. Yuguda said the agricultural sector in the country is expected to grow significantly shortly, noting that some of the standards have been developed with the synergy.

The SEC boss said that the development of these standards will pave the way for the export of these products to the international market which would ultimately boost the economy.

According to him, despite the nation’s abundant agricultural resources, it has continued to rank behind peers in the international market in terms of commodities due to poor standardisation while smaller African countries receive better recognition and acceptance. He said that the commission is pleased about the new government’s plans to support the commodities sector, adding that this would further boost the SEC’s efforts at developing the Commodities sector.

“Already, we have licensed a total of five exchanges and also approved the trading and framework for operations of different instruments. We are collaborating with NAICOM, CBN, SON and the Federal Ministry of Solid Minerals and Mines in various ways ranging from capacity building, standard setting, domestic and international advocacy, among others.”

Yuguda stated that as part of its implementation of the Capital Market Master Plan, the commission constituted a Technical Committee on Commodities Trading Ecosystem whose mandate was to identify challenges of the existing framework and develop a roadmap for a vibrant ecosystem.

“A committee comprising various stakeholders including the SON was set up to drive the implementation of the report. One of the recommendations in the report identified the development of grading and standardisation system in line with international best practice,” he said.

The commission has stepped up the interface with issuers to address issues confronting the group and discourage persistent delisting of firms from the capital market.

According to Yuguda, SEC has set up the Securities Issuers Forum, in collaboration with Nigeria Employers Consultative Association (NECA) to enable the commission to engage the association and discuss issues confronting them and find lasting solutions to them. He said: “When issuers delist, they do because of certain issues. So we decided to engage the Nigeria Employers Consultative Association, NECA and set up the Securities Issuers Forum. This was done to sit and discuss the issues and find solutions to them.

Yuguda also disclosed that the commission has introduced incentives to encourage companies to list on the exchange, noting that listing provides enormous benefits to both the companies and investors.

The SEC Boss stated that some strategic listings have happened in the market in recent times, noting that the commission is also encouraging the diversification of the equities market by seeking the listing of more companies within the power generation, telecommunications and food sectors.

He pointed out that when capital markets are developed, the entire engine of savings, investing and allocation of resources to the projects that have the highest expected returns are made easy. He assured that the commission would continue to collaborate with various market stakeholders to support impactful innovation in the capital market.

Meanwhile, negative sentiment persisted in the equities sector of the Nigerian Exchange Limited (NGX) as profit-taking in Airtel Africa and 11 stocks dragged capitalisation further by N7 billion.

At the close of transactions yesterday, the all-share index (ASI) declined by 14.33 points, representing a loss of 0.03 per cent to close at 56,024.52 points. Also, market capitalisation lost N7 billion to close at N30.506 trillion.

The decline was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Airtel Africa, Flour Mills of Nigeria, Nigerian Exchange Group, Union Bank of Nigeria (UBN) and Lafarge Africa.

Analysts at Vetiva Dealings and Brokerage said: “Giving the waning sentiment observed in the market over the recent sessions, we expect to see a mixed session in the space, albeit with a bearish tilt, as investors maintain a cautious approach to the market.”

However, market breadth closed positive, as 32 stocks gained relative to 12 losers. Union Bank led the losers’ chart by 8.86 per cent, to close at N7.20 kobo. Flour Mills followed with a decline of 4.20 per cent to close at N33.10 kobo while Nigerian Exchange Group declined by 3.11 per cent to close at N28.

Prestige Assurance depreciated by 2.44 per cent to close at 40 kobo, while Courteville Business Solutions declined by 2.08 per cent to close at 47 kobo.

FBN Holdings shed 74 per cent to close at N13.50 kobo. Fidelity Bank dropped 69 kobo to close at N5.76 kobo. Lafarge WAPCO fell by 56 per cent to close at N25.55 kobo. Zenith Bank lost 18 per cent to close at N27.95 kobo. GTCO also shed 18 per cent to close at N27.80 kobo.

Eterna and Honeywell Flour Mills recorded the highest price gain of 9.87 per cent each to close at N12.25 and N3.45 respectively, while FTN Cocoa processors followed with a gain of 9.86 per cent to close at 78 kobo.

Cornerstone Insurance went up by 9.78 per cent to close at N1.01, while Wapic Insurance appreciated by 9.52 per cent to close at 46 kobo.

Academy Press gained eight kobo to close at N1.89 kobo. Unity Bank appreciated by 7.14 per cent to close at 60 kobo. Mansard increased by 6.38 per cent to close at N3.50 kobo. Ikeja Hotel added 6.22 per cent to close at N2.39 kobo. Royal Exchange advanced by six per cent to close at 53 kobo. UPDC rose by 5.71 per cebt to close at N1.11 kobo. Cutix also garnered 5.51 per cent to close at N2.49 kobo.

The total volume traded increased by 23.30 per cent to 397.625 million units, valued at N6.537 billion, and exchanged in 5,613 deals. Transactions in the shares of NPF Microfinance Bank topped the activity chart with 100.762 million shares valued at N181.373 million.

Guaranty Trust Holding Company (GTCO) followed with 43.031 million shares worth N1.197 billion, while Japaul Gold & Ventures traded 27.838 million shares valued at N11.541 million. Fidelity Bank traded 24.297 million shares valued at N140.898 million, while Access Holdings sold 23.021 million shares worth N293.044 million.