28 August 2008
Lagos — President Umaru Musa Yar'Adua has given approval for the amendment of the Companies and Allied Matters Act (CAMA), 1990, to facilitate the implementation of measures advised by the Presidential Advisory Com-mittee on the Capital Market.
Such amendment, THISDAY gathered last night, would be sent to the National Assembly for approval.
While that is being done, the President has also approved emergency provisions in the Nigeria law to be used to enable companies to buy their shares back as soon as possible.
THISDAY also gathered that the President has also approved the amendment of the Pension Fund to allow such funds to be invested in the capital market.
In a bid to stem the market meltdown (persistent fall in the shares) in the capital market, the Federal Government had invited the management of the Nigerian Stock Exchange (NSE) and other stakeholders for a meeting in Abuja last Tuesday. Specifically, the meeting was geared towards stopping the persistent slide in the prices of stocks.
At the meeting, a number of measures were adopted by stakeholders to stop the tide of sliding fortunes of stocks in the country.
The meeting resolved that the office of the Attorney General of the Federation should issue an exemption to the provisions of the relevant sections of CAMA, to permit quoted companies to buy back up to 20 per cent of their shares to curb the spate of bearish trading in the market.
The CBN was also directed to take appropriate measures to ensure adequate liquidity within the system to oil operations in the capital market.
They meeting also resolved that a Capital Market Stabilisation Fund be established, as an intervention instrument to stem the meltdown in the market.
Also, the commercial banks were advised to restructure existing facilities to aid operations of licensed stockbrokers, institutional and individual investors on longer repayment terms.
Both the Securities and Exchange Commission (SEC) and the NSE, all capital market operators also agreed jointly to reduce the burden on investors by cutting fees significantly. Already, the NSE, with effect from yesterday, cut its fees by 50 per cent.
The NSE was also directed to review its trading rules and regulations. With effect from yesterday, it has taken the following steps: One per cent maximum downward limit on daily price movement would be allowed, while the current five per cent limit on upward movement is retained.
Be the first to Write a Comment!
Copyright © 2008 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
