Stories by Chinenye Anuforo
Following the growing interest in dematerialisation, also known as the digitisation of physical paper, the Nigerian shareholders have been called to embrace the scheme to savour its numerous benefits. Key adopters include the paper-intensive financial services and insurance industries as well as governmental agencies across the world.
Dematerialisation, for short, ‘demat’, is the process by which an investor can get physical certificates converted into electronic form maintained in an account with the depository.
An organisation responsible for maintaining an investor’s securities in the electronic form is called the depository and in the nation’s stock market, it is the Central Securities Clearing System (CSCS) Plc.
Joe Mekiliuwa, the General Manager, Operations, at the CSCS said the mandate given by Securities and Exchange Commission (SEC) to capital market stakeholders is that they must achieve 100 per cent dematerialisation. He said, “we are hoping to achieve 100 per cent dematerialisation of share certificates by the end of 2016 third quarter (September). Currently, over 98.4 per cent of shares’ certificates of quoted companies on the NSE are dematerialised in the CSCS depository. The CSCS is working assiduously with registrars to ensure that full dematerialisation is achieved as targeted. Efforts are geared towards assisting the relevant registrars to ensure that the remaining, although seemingly infinitesimal, are firmly attended to so as to achieve 100 per cent success rate before the end of Q3 2016.”
In order to address various problems associated with share certificates such as delay in issuance, verification, loss, theft and forgeries, among others, SEC, in partnership with other stakeholders, resolved to eliminate these problems by opting for the full dematerialisation of share certificates.
The full dematerialisation move is aimed at completely eliminating existing physical share certificates in the Nigerian capital market and putting to an end the issuance of new share certificates. The registrars of companies, who are involved in the implementation process are required by SEC to turn in the registers of all companies they manage to the CSCS depository within a given period of time. For the shares to be accessed by the shareholders in their accounts under a stockbroking firm, shareholders are required to instruct their registrars, through their brokers, to migrate such shares to their accounts with the stockbroking firms. Consequently, shareholders are urged to approach the stockbroking firms of choice, obtain and fill in a migration form, which will be forwarded to the registrar to enable them to advise the CSCS to migrate the shares to the shareholder’s account with the stockbroking firm and the shares are migrated by the CSCS as advised.
With reinforced commitment and determination at the commencement of the dematerialisation exercise in June 2015, it has yielded significant success as incidences of forgery, theft and loss of share certificates have drastically reduced.
Trading in demat segment completely eliminates the risk of bad deliveries; avoids the cost of courier/notarisation and the need for further follow-up with your broker for shares returned for company objection; no loss of certificates in transit, and saves substantial expenses involved in obtaining duplicate certificates, when the original share certificates become mutilated or misplaced.
Demat increases liquidity of securities due to immediate transfer and registration. Reduction in brokerage for trading in dematerialised shares receive bonuses and rights into the CSCS account as a direct credit, thus eliminating risk of loss in transit. It also makes it possible to do away with physical stock certificates. Electronic copies of stocks can be quickly made and archieved for efficient retrieval and transmission.
Other benefits, which full dematerialisation would bring to the market include immediate availability of the shares for trading as soon as mandate is given to the brokers, enhancement of price discovery and deepening of the market, possibility for securities lending and borrowing by shareholders for more income.
Mekiliuwa said the very small amount of share certificates not dematerialised is a result of the inability of some registrars to meet their recapitalisation deadline. Some were acquired by bigger firms or merged with others, while others have discontinued that line of business.
“That means the register they manage will be handed over to a new registrar. That implies that the new registrar that will be taking over will do some reconciliation. The former registrar may not be fully automated and this will affect the extent of the continuation. If they are manually or partially driven by information technology, the implication is that a lot of manual work will be done. The new registrar will have a lot to do to reconcile the new accounts at the client and the company levels before updating their new register.
“For the small segment remaining, the new registrars may be having one or two issues. However, we are working with them, hence the success recorded thus far. There was a time when our level of success was below the current level, and we had to invite the registrars to a meeting to guide them on the best ways to solve the problem and make the required progress,” he said.
Guinness targets exports to boost sales, generate forex
Guinness Nigeria Plc says it is planning to increase exports to improve sales and generate more foreign exchange as the country’s second largest brewer battles to overcome economic slump.
The unit of London-based Diageo Plc will consider selling Guinness stout and the herbal drink, Orijin, in South Africa to boost the proportion of beverages it sends to international markets.
Chief Executive Officer, Peter Ndegwa, said the move will help resolve the brewer’s shortage of foreign currency in Nigeria, which it needs to pay for imported goods.
“With all the challenges we have had with foreign currency availability, we realise that export is a great opportunity to gain foreign exchange and stabilise. We have heard a lot of inquiries from South Africa and we are currently in the process of seeing how we can export some of our brands to the country,” Ndegwa said.
Heineken NV is also expanding in South Africa with the recent introduction of Sol Mexican lager, part of a plan to boost its market share in a country dominated by SABMiller Plc. Guinness Nigeria will also seek to export beer to target Africans living on other continents, he said. Generating foreign currency from exports would help the company offset a scarcity of dollars in its home market caused partly by a slump in oil revenue, the country’s biggest earner. The economy is on track to shrink 1.8 per cent this year, according to the International Monetary Fund (IMF).
This would be the country’s first full-year contraction since 1991, according to data from the National Burean of Statistics (NBC).
Guinness Nigeria is seeing drinkers switch to cheaper beer brands such as Satzenbrau as disposable incomes decline, and is expanding its range of spirits to increase choice in its more affordable product range. “We are focused on brands that are lower priced by either improving distribution or improving awareness.”
The Guinness boss said the company worked toward increasing the amount of raw materials sourced locally in the past 18 months to make savings through the reduction of imports, a strategy that will also ease the need for foreign currency, he said. The brewer will invest £12 million ($15.9 million) in a plant in Benin City, in the South of the country, to reduce spending on imports, the CEO said.
NB woos consumers with bigger UCL audience
By Chinwendu Obienyi
Nigerian Breweries (NB) has promised its consumers broader audience and world of exciting football experience in the 2016/2017 season of the UEFA Champions League (UCL).
Speaking at the unveiling of the Heineken Champions League Planet in Lagos recently, the Marketing Director, Nigerian Breweries, Mr. Franco Maggi, noted that its aim is to do big things this season by giving non forgettable experiences to its consumers as he called on the general public to enjoy the games and also drink responsibly.
“This is actually our 11th year of connecting Heineken to the UEFA Champions League and, of course, we want to do big things by giving experiences to many people as much as possible so that it cannot be forgotten. Over 100 countries have been activating this property and this is an historic achievement for us at NB, as everyone can see great results from Heineken. I really would like to wish everybody to enjoy the games, to enjoy a great season of soccer, a great season of UCL and, of course, for those drinking Heineken to enjoy responsibly,” he said.
Portfolio Manager, International Premium Brands at NB, Mr. Sampson Oloche, added that the Heineken Champions League Planet will be moved to more cities so as to give consumers a broader audience and broader world of soccer experience.
“The 2016/17 season is going to be quite different as we will unveil a new advert to Nigerians featuring a champions league legend and this new advert sets the champions league tone for the season. This year, we are taking the champions league Heineken planet to more cities and more consumers. It is our own way of allowing Heineken consumers to connect to a broader audience and broader world,” Oloche stated.
The Heineken Champions Planet has over the years provided premium viewing experience for consumers and visitors to enjoy all the matches alongside captains of the industry, legends of the game and celebrities in the entertainment industry.