Afrinvest, others fault stock broking firms’ suspension by NSE

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THE Management of Afrinvest West Africa Limited, yesterday, described the suspension order placed on the company by the Nigerian Stock Exchange (NSE), on Tuesday, as “unfair” and a clear departure from the decision reached by all parties on January 7, 2011.

Afrinvest West Africa is one of the 60 Stock broking firms suspended on Tuesday,due to their alleged non-compliance with the N70 million minimum capital requirement stipulated by the Securities and Exchange Commission (SEC), inDecember, 2005.

Speaking with The Guardian yesterday, Managing Director, Afrinvest West Africa, Mr Ike Chioke, explained that on January 7, 2011, a meeting presided over by SEC was held, where it was agreed that Stock broking firms should be given up to March 31,2011 to put their houses in order.

He explained that clientsfunds are intact, secured, adding that the NSE should have respected agreement reached by all parties on January 7, 2011.

Also,BGL Securities Limited said: “We were taken by surprise as we had earlier taken steps to meet the requirements stated by the Nigerian Stock Exchange. We are currently working with the Stock Exchange to update their records and are confident that this matter will be resolved within the next 24 hours.”

Others firms affected by the suspension are Adamawa Securities Limited , Alangrange Securities Limited, Associated Asset Managers Limited , Belfry Investments And Securities Limited, BGL Securities Limited, Calyx Investment & Securities Limited, Cardington Securities Limited, Cashville Investment & Securities Limited and Century Securities Limited.

Others include Colvia Securities Limited, Consolidated Investment Limited, Cowry Asset Management Limited, Dakal Services Limited, DBSL Securities Limited, De-lords Securities Limited, Dependable Securities Limited, Diamond Securities Limited, Empire Securities Limited, Enterprise Stockbrokers Plc, ESS Investments And Trust Limited, Eurocomm Securities Limited and Express Discount Asset Management Limited.

Also included in the list are FBC Trust And Securities Limited, First Inland Securities & Asset Mgt Limited, First Allstate Securities Limited, First Equity Securities Limited, FIS Securities Limited, Genesis Securities & Investment Limited, Heartbeat Investment Limited, Hedge Securities & Investment Co. Limited, Independent Securities Limited, Intercontinental Securities Limited, Lion Stockbrokers Limited, MBL Financial Services Limited and Midland Capital Markets Limited.

Others are Molten Trust Limited, Nigerian Stockbrokers Limited, Peninsula Asset Management And Investment Company Limited, Perfecta Investment Trust Limited, PIPC Securities Limited, Pivot Trust & Investment Company Limited, Professional Stockbrokers Limited, Quantum Securities Limited, Rostrum Investment & Securities Limited, Securities Solutions Limited, Securities Trading & Investment Limited, Sigma Securities Limited, Sikon Securities & Investment Limited, Supra Commercial Trust Limited, Support Services Limited, TFS Securities & Investment Co. Limited, UBA Stockbrokers Limited, Valmon Securities Limited, Vision Trust & Investment Limited, Wizetrade Cap & Asset Mgt Limited and Yobe Investment & Securities Limited.

Reacting to the development, Alhaji Rasheed Yusuf, the President of Association of Stock broking Houses of Nigeria (ASHON), said the market regulators should have honoured the plea of the brokers to wait till April, when AMCON would complete the buying of toxic loans.
Yusuf said the suspension will send wrong signal to the investing public and will affect investors’ confidence in the market.
He said though the regulators have the right to suspend the erring brokers, but the way they are applying it is sending negative signal to the public.
Also, Mr Boniface Okezie, who spoke in a similar vein, called for caution on the part of the Nigerian Stock Exchange.
Managing Director of Compass Investment and Securities Limited, Mr Emmeka Madubuike, said “the rules have been there since 2008, if you have negative capital base, you cannot trade, but the question is, is this the appropriate time?
Headded“the exchange thought this is the right time and that is why we are looking for more information that could enable us make suggestion to the exchange on how best to handle the situation”.

By Moses Ebosele and Helen Oji

GUARDIAN January 20, 2011