FG to divest 24% holding in Transcorp Hilton

FG to divest 24% holding in Transcorp Hilton

By Ademola Alawiye, Published: Tuesday, 27 Apr 2010


The Director General of the Nigerian Stock Exchange, Prof. Ndi- Okereke Onyuike announced on Monday that the Federal Government is set to sell 24 per cent of its holding in Transcorp Hilton Hotel .



Onyuike, who disclosed this on the trading floor of the NSE, said trading would start on the shares in the next two weeks, adding that the shares would be sold first in Abuja, while the remaining shares would be sold in Lagos. She further said that ”Brokers will not be allowed to buy into their own accounts so as to distribute later. They will only buy the shares in the name of investors.”



The Federal Government has about 45 per cent in the total shareholding structure of the hotel, situated in Abuja. Meanwhile, the DG also spoke on the Central Bank of Nigeria‘s pronouncement that owners of shares in the capital markets are no longer eligible to use them as collateral securities for loans from banks.



Onyiuke said the CBN policy had really caused untold hardship for the market as they were being verbally attacked by investors who felt short-changed by the action of the apex bank. She said the NSE was being carpeted by all and sundry, as if the policy emanated from it, noting that this had resulted in the dumping of shares in the market, thus forcing down the prices of stocks in the last one week.



She said that, the misunderstanding in the policy pronouncement by CBN has been so much that the council of the Exchange had to meet with the CBN and the Securities and Exchange Commission , who said ”the policy restriction of CBN is meant for stockbroking firms and banks as regard to margin lending.” Onyiuke while explaining the CBN‘s policy position, noted that individual investors both local and foreign are eligible to use their stock holdings to borrow from the banks.



According to her, only brokerage firms are barred from using their shareholdings to get facilities from the banks. To this end, she said the apex bank would organise a workshop to explain the positions of the policy to operators in the market. The CBN‘s policy move which is said to be aimed at bringing about sanity to the financial market is presently making investors in the market to dump their shares, especially that of banks at irrational prices.


(Source:Punch)


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