The National Association of Securities Dealers [NASD] Plc, which is the platform for the trading of unlisted securities in the over-the-counter (OTC) has declared total market capitalisation of ₦590 billion, with a nominal value of ₦41 billion as at 31 December, 2014. Total number of issued shares that can trade on the market is therefore 83 billion shares.
The Managing Director of NASD, Bola Ajomale declared this at a press briefing which took place in Lagos.
Ajomale explained that 120 million shares worth ₦2.32 billion were exchanged in 417 deals by investors on the NASD OTC Market from January to December 2014 compared to 239,165 shares worth ₦76 million that were exchanged in 34 deals from July to December 2013. The market continues to grow in size and intensity each quarter of the year. This reflects improved investor confidence in the OTC market and better understanding of the market on the part of brokers.
Ajomale however said that the Dematerialisation levels were still low at 2.05 billion shares or 2.48 per cent. ‘’We expect that this will increase significantly as shareholders become more aware of the safety and liquidity advantages of dematerialization,’’ he said.
According to him, of the 86 participating institutions, 37 had traded on the NASD Over The Counter [OTC] market by the end of 2014., the top five traders accounted for 62.9 per cent of total market activity while the top 15 participating institutions accounted for 93.6 per cent of market activity. ‘’We understand that some of the Institutions are still developing trade competence for the OTC market,’’he said.
Talking about value added achievements of the OTC market, the managing director mentioned granted shareholders easy access to trading and depository statement, and allowed shareholders the opportunity to use their unlisted shares as collateral for loans, provided access to pre-trading information via CSCS website and fine tuned the electronic account opening process.
Ajomale also explained the introduction behind the new product lines.
In his words: ‘’We started the market with equity, we anticipate growth in the equities market and we also anticipate the introduction of other asset classes for trading on our platform.
‘’We are going to build more relationship with all the participants in the market, including the shareholders of all unlisted companies; this will increase the level in the number of trades as well as demateralisation. We will promote awareness and extend knowledge to shareholders to ease their participation in the OTC market through their brokers.
‘’Our focus this year is to showcase the opportunities of the NASD OTC market to shareholders, issuers and market operators in states within Nigeria where certain attractions exist.
‘’ Our plan for this year is to strengthen relationship with the management of all unlisted securities, we seek to organise series of fora and meetings to educate them about the opportunities in the OTC market.
‘’We will capture bilateral capital market deals in infrastructure and venture capital to bring it under proper coverage. This will show that the capital market is truly larger that we have seen.
The Managing Director expressed anticipated growth and expansion in the areas of number of securities, trading volume of dematerialised securities, number of participating institutions, turnover volume and value, as well as product line.