February 21st, 2010 by Tom Minney
The Uganda Securities Exchange (www.use.or.ug) was set to open the Securities Central Depository at the end of last week. The SCD is an electronic system of keeping traded shares records at the stock market in a single location and would end the issuing of paper certificates as evidence of ownership.
According to the Monitor newspaper (www.monitor.co.ug), the SCD was to “go live” on 18 February, quoting Ms Harriet Kiwanuka, the head of trade, research and market development, USE. The move will prepare the USE for electronic trading of shares and is another step towards link-up in the regional markets, including the advanced Nairobi Stock Exchange.
Stockbrokers are set to ask owners of the paper certificates to return them in exchange of electronic transaction accounts, similar to bank accounts.
Ms Kiwanuka is reported as saying both new paper certificates and electronic accounts will be issued until the USE adopts electronic record keeping and trading.
Mr Peter Okoed, the senior portfolio planner at stockbroker Dyer & Blair (www.dyerandblair.com), is reported in Monitor as saying that the SCD will make the exchange attractive to foreign investors who are usually discouraged to invest by the communication that it takes for them to receive their share certificates.
With this system, investors will only trade their shares after getting electronic accounts.
November 12th, 2009 by Tom Minney
The Nigerian Stock Exchange (NSE – www.nigerianstockexchange.com) on 9 November announced that it is seeking some N5 billion (US$33 million) in capital for its fifth software upgrade and also to help finance the Sierra Leone stock exchange.
NSE Director General Ndi Okereke-Onyiuke reportedly told local media that the exchange’s software has been upgraded four times, with the next in 2010, at a likely cost of 16 mln-20 mln euros ($24 mln-$30 mln). She added that the London Stock Exchange had reportedly spent 30 mln euro on its software, and talks continue on how the LSE could help in Nigeria.
Apparently donors gave grants to Ghana, Kenya, Tanzania and Uganda to upgrade their stockmarkets, but believe that Nigeria is too rich to need this.
The Sierra Leone stock exchange was launched by Sierra Leone President Dr. Ernest Bai Koroma on 17 July 2009, after being inaugurated in 2007. According to Nigerian media, the NSE launched the Sierra Leone exchange free of charge and now seeks financing for electronic trading there. The Sierra Leone exchange is under the wing of the central Bank of Sierra Leone (www.bankofsierraleone-centralbank.org). Okereke-Onyiuke said the NSE assisted Ghana previously and plans to help Liberia open a stock market.
According to other reports, the NSE earlier this year cut its holdings in the Central Securities Clearing System Ltd (www.cscsnigerialtd.com) from 100% to 30%, after a private placement of the shares.
The CSCS is the clearing house and central securities depository of the Nigerian stock market. It includes an integrated central securities depository (CSD) offering clearing (electronic book-entry transfer of shares from seller to buyer) and settlement (payment from buyer to seller) for all NSE transactions. All securities listed for trading on the NSE must have their certificates deposited in CSCS before transactions can take place. The CSCS was incorporated in July 1992 and started operating in April 1997.
She is reported to have told the House of Representatives Committee on Capital Markets: “We had to do this because our shareholders wanted to have better stake in the company, and again it gives room for proper corporate governance and a sense of belonging to all our stakeholders.”