Peter OBIORA investadvocate

Lagos (INVESTADVOCATE)-The Central Securities Clearing System Limited (CSCS), the Nigeria’s Clearing House has reported that only 40 percent (40%) investors in the Nigerian Capital Market (NCM) has embraced the electronic dividend system of payment (e-dividend) introduced into its Market February 28 2008.

 

A Source at the Computer Department of the Nigeria’s Clearing House (name withheld) because he was not allowed to speak to the Media confirmed this to investadvocate in Lagos Nigeria.

 

“We have about 40% of investors in the Nigerian Capital Market who have embraced the e-dividend payment system according to records in our system” the Source said.

 

This is coming on the heels of reports that Nigerian Shareholders are displaying a nonchalant attitude towards taking advantage of the payment system introduced in year 2008 by Nigeria’s Apex Capital Market Regulatory Institution, the Securities and Exchange Commission (SEC).

 

The e-dividend system would enable Shareholders whose accounts will be credited 24 hours after declaration of dividends, to get paid immediately through their Bank Accounts. This would enable the shareholders to be able to utilise their investments returns whenever they so wish.

 

From the review of CSCS performance for year 2010 and made available to investadvocate, the Nigeria’s Clearing House affirmed that there are now over 4.5 million shareholders in the CSCS System going by statistics gathered at the end of 2010 in comparison to over 4.32 million shareholders recorded in year 2009.

 

According to the CSCS, this statistics clearly represent an increase of 4.2% in the number of shareholders who maintain accounts with Central Depository System.

 

40% of the reported current 4.5 million shareholders by the CSCS in its year 2010 review represent 1.8 million shareholders that have embraced the e-dividend system of payment.

 

However, in the review, CSCS affirmed that it dematerialised 886,124 share certificates for year 2010 compared to 2.0 million share certificates in year 2009 showing a decrease of 55.7% in dematerialisation of share certificates in the Nigeria’s Exchange.

 

The Nigeria’s Clearing House said from 1997 to year 2010, it has thus far dematerialised 13.4 million share certificates.

 

CSCS also said that it provided the platform for a full dematerialised Securities Market since 1997 and the infrastructure has since remained under-utilised.

 

Using the dematerialisation platform, the CSCS reported that as advised by the Registrars during the year 2010 review period, it processed corporate events as detailed below:

E-Bonus Shares, it processed 19.2 billion units of shares belonging to 2,108,544 investors.

 

E-Public Offer, it processed 0.7 billion units of shares for 400 investors and on the E-Rights 3.2 billion units belonging to 505 shareholders processed electronically.

 

Others are E-Placement where it processed for 33 investors 3.1 billion units of shares in terms of volume and on E-Merger the CSCS processed for 14,054 investors shares representing 15.3 billion units in year 2010 review period.

 

Meanwhile, Bayo Olugbemi, Managing Director (MD) First Registrars Limited, a subsidiary of First Bank of Nigeria Plc has advised investors in a recent interview with investadvocate to embrace the e-dividend payment system.

 

Olugbemi affirmed that it is a seamless exercise that would save the investors money and time and help avoid the incidence of unclaimed dividend that has been raging on in the Nigerian Capital Market.

 

“We have encouraged people to do e-dividend, at First Bank; we don’t have up to 10 percent of shareholders that have embraced the electronic dividend; which is estimated to be about 130,000 compared to about 1.4 million shareholders. I have printed forms, done adverts and other awareness campaign for people to embrace e-dividend; but the figure to this effect still remains low” he said.