SEC Benchmarks 32 Stocks for Collateral

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June 14 2013/Goddy Egene and Abiodun Eromosele/THISDAY

 

In move to forestall a recurrence of the 2008 stock market downturn, the Securities and Exchange Commission (SEC) Thursday unveiled 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:

1.
Ashaka Cement Plc
2.
Cadbury Nigeria  Plc
3.
Conoil Nigeria Plc
4.
Custodian and Allied Insurance Plc
5.
Dangote Cement Plc
6.
Dangote Flour Mills Plc
7.
Dangote Sugar Refinery Plc
8.
Fidson Healthcare Plc
9.
Flour Mills Nigeria Plc
10.
Glaxo Smithkline Consumer Plc
11.
Guinness Nigeria Plc
12.
Honeywell Flour Mill Plc
13.
International Breweries Plc
14.
Julius Berger Plc
15.
Lafarge Cement WAPCO Nigeria Plc
16.
Livestock Feeds Plc
17.
Mansard Insurance Plc
18.
Mobil Oil Nigeria Plc
19.
National Salt Company Nigeria Plc
20.
Nestle Nigeria Plc
21.
Nigerian Aviation Handling Plc
22.
Nigerian Breweries Plc
23.
Oando Plc
24.
Okomu Oil Palm Plc
25.
PZ Cussons Nigeria Plc 
26.
Presco Plc 
27.
Seven-up Bottling Company Plc
28.
Total Nigeria Plc
29.
Trans National Corporation Plc
30.
UACN Property Development Plc
31.
Unilever Nigeria Plc
32.
UAC of Nigeria Plc 

 

SEC advised investors 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.

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