By Udeme Ekwere

Tuesday, 25 Jan 2011

Some investors have withdrawn their accounts from stockbroking firms suspended last week by the Nigerian Stock Exchange over low capital base.

This came despite repeated assurances by the NSE to shareholders on the safety of their investments with the companies.

The NSE had on Thursday, assured investors, especially clients of the stockbroking firms that were suspended, of the safety of their investments.

The Interim Administrator of the Exchange, Mr. Emmanuel Ikazoboh, said a circular had been issued to remind all suspended dealing member firms of their duty to instruct and appoint another stockbroker to carry out the mandate of their clients prior to their suspension.

Ikazoboh said the circular was in line with Article 57 (d) of the Rules and Regulations Governing Dealing Members, which provides that: “The dealing member shall be under a duty to instruct and appoint another dealing member to carry out any instructions already received by it on behalf of its clients, prior to suspension and shall immediately notify The Exchange in writing of such appointment.”

But investigation by our correspondent on Monday, revealed that some investors were still giving orders to move their accounts to other firms.

An investor, Mr. Femi Oyetunji, explained that following the suspension of two of the firms, which he maintained accounts with, he had applied for the transfer of his accounts to another stockbroking firm that was not affected.

He said, “My family and I have some shares, under different names with two of the affected companies, and I am skeptical about their ability to recover. Some of my friends have also decided to transfer their accounts to other firms.

“I think I should have the choice to decide which firms I want to handle my accounts and that of my family. I do not want to leave my shares at the discretion of whoever the stockbroker wishes to transfer them to. I have done my investigation, and decided on the new firms I want to manage my accounts.”

A stockbroker who spoke to our correspondent on condition of anonymity, confimed that some investors were still panicky due to the suspension, and were making plans to withdraw their accounts.

He said, “Although the NSE told clients of the affected companies to appoint other stockbrokers to handle their accounts during their suspension, some investors might decide to have their own arrangement and ask for inter-membership transfer of their accounts to firms they are more comfortable with.”

Source: Punch