NSE reports only N300 billion margin loan in Capital Market
-N700 billion in Real Estate
Peter OBIORA
Proshare NI
July 07, 2009 15:50 GMT
The Nigerian Stock Exchange (NSE) has reported that only N300 billion Margin Loan facilities are with Stockbrokering firms in the Nigerian Capital Market (NCM); and about N700 billion in the hands of real estate developers.
Professor (Mrs.) Ndi Okereke-Onyiuke, the Director General/Chief Executive Officer (DG/CEO) of the NSE made this report today Tuesday July 02 2009 in Lagos Nigeria at the town hall meeting with the CEO’s of quoted companies on the Stock Exchange.
“Those that are telling you that Margin Loans is with Stockbrokers, it is only N300 billion that is with them, the rest of it over N700 billion are not with Stockbrokers” Prof. (Mrs.) Okereke-Onyiuke affirmed.
She further affirmed that the Banks loaned the money to people and institutions that are into Real Estate. “Capital Market money is sitting in Banana Island, all the buildings there were built from money in this Market” she said.
She asserts that people were borrowing money for Real Estate development which was the reason the NSE introduced the Real Estate Investments Trust (REIT) in order to encourage the growth of the Sector.
“Real Estate is a long term gestation period; we request that people borrow money from the long end of the Market, by introducing REIT in the Capital Market, people can get long term funds for building and selling, but they rushed to the Banks and borrowed money” she said.
Prof (Mrs.) Okereke-Onyiuke affirmed that many people where in the middle of the Real Estate development when the global meltdown struck.
The DG of The Stock Exchange confirmed that these people were able to access the Market because the Banks saw share certificates as shareholding and most sacred collateral for lending. “So they asked for your shareholding in Stocks as collateral for lending you money for Real Estate and people borrowed from Banks using their shareholding for other interests” she said.
