SEC unveils 32 Securities for Margin Loans
In move to prevent a relapse to the 2008 stock market downturn, the Securities and Exchange Commission (SEC) Thursday named 32 securities that can be used as collateral for margin loans.
Realising that unsupervised use of margins to fund investment in listed equities contributed to the share price crash in 2008, the SEC and Central Bank of Nigeria (CBN) introduced a set of rules to regulate margin lending going forward.
Unveiling the list of securities that can be used for margin loan facilities, SEC said the list is not an investment recommendation but rather a guide to those who wish to engage in margin activities.
However, bank stocks are excluded from being used as collateral for margin trading transactions. The approved 32 securities include: Ashaka Cement Plc; Cadbury Nigeria Plc; Conoil Nigeria Plc; Custodian and Allied Insurance Plc; Dangote Cement Plc; Dangote Flour Mills Plc; Dangote Sugar Refinery Plc; Fidson Healthcare Plc; Flour Mills Nigeria Plc; Glaxo Smithkline Consumer Plc; Guinness Nigeria Plc; Honeywell Flour Mill Plc; International Breweries Plc; Julius Berger Plc.
Others are: Lafarge Cement WAPCO Nigeria Plc; Livestock Feeds Plc; Mansard Insurance Plc; Mobil Oil Nigeria Plc; National Salt Company Nigeria Plc; Nestle Nigeria Plc; Nigerian Aviation Handling Plc; Nigerian Breweries Plc; Oando Plc; Okomu Oil Palm Plc; P Z Cussons Nigeria Plc; Presco Plc; Seven-up Bottling Company Plc; Total Nigeria Plc; Trans National Corporation Plc; UACN Property Development Plc; Unilever Nigeria Plc; and UAC of Nigeria Plc
SEC advised investors to check to check the Margin List before entering into a margin lending arrangement with a broker or a bank, warning that only persons and entities who are knowledgeable about margin activities should engage in such transactions.
Meanwhile, the stock market dipped by N500 billion as the bears overran the market, causing the Nigerian Stock Exchange (NSE) All-Share Index to close at 37,406.73, market capitalisation ended at N12.017 trillion. A total of 57 stocks lost value while only 15 appreciated.