Ten companies have indicated interest to have their shares traded on the NASD Limited as the platform for the trading of unlisted securities prepares to go live next month.
NASD Limited, which was formed in 1998 to promote and operate over-the-counter (OTC) trading, recently got its final approval from the Securities and Exchange Commission (SEC). NASD is waiting for the commission to approve its updated set of rules before commencing operations next month.
But the Managing Director of NASD Limited, Mr. Bola Ajomale, told THISDAY last Monday that directors and shareholders of unlisted companies are very excited to trade their shares on the platform.
According to him, 10 companies have already indicated interest for their shares to be traded on the platform.
"Although we do not require the permission of the companies for their shares to be traded, 10 companies have already indicated they do not mind their shares being traded on the platform" he said.
Ajomale said the company had reached agreement with the Nigerian Stock Exchange (NSE) and Central Securities Clearing System Plc (CSCS) to use their trading facilities and clearing facilities respectively.
"We have resent an updated set of rules to SEC and we expect response soon. We are going live in May and the excitement in the market is great because the NASD platform will complement the activities of the NSE and make the capital market for robust and attractive," he said.
The Director General of SEC, Ms. Arunma Oteh, and Chief Executive Officer of the NSE, Mr. Oscar Onyema, have already said NASD's operations would assist to revolutionise the nation's market.
Market analysts have also hailed this development, saying it would be of great benefit to investors who bought shares of unlisted public liability companies (PLCs).
Many PLCs sold shares to investors during the stock market boom period of 2006 and 2007 with the promise to list them on the NSE. However, they have not listed the companies, thus leaving the investors stranded. But with NASD such shares would not be traded.
Speaking on how the NASD Limited will assist investors of unlisted PLCs, the Chairman, Technical Committee of NASD Limited, Mr. Victor Ogienwonyi, said the way the OTC market works is for investors in PLCs, who want to sell their shares to give them to a broker, who will list the offer on the NASD and anyone buying will also contact a broker to put in a bid on his behalf.
"Once a trade occurs, the NSAD will list the trade and ensure settlement through the Securities Clearing and Settlement System Plc(CSCS). Once a company is a PLC, its shares can be traded on the NASD whether it is formally listed or not. There are thousands of investors who will want to get out of their positions. OTC markets like NASD will provide the exit for the PLC stocks that are not listed. The market will also be a place to buy and sell bonds especially the states and corporate debentures that have little liquidity," Ogiemwonyi said.