As the December deadline of the one billion naira capitalization stipulated by the Nigerian stock exchange commission draws near, many Nigerian stock broking firms are embarking private placement to source additional funds from specific members of the public. The Nigerian stock exchange has foreclosed listing of any dealing members as a quoted company on the Nigerian exchange.
This is raising chills over and fears that many of the Nigerian stock broking firms might get booted out of business due to their inability to meet up with the given deadline date. Already the Nigerian federal ministry of finance is insisting that there is no going back on the recapitalization and the deadline given. The Director-General of the Nigerian Stock Exchange, Prof. Ndi Okereke Onyuike, has criticized  the move, saying that it wont be proper for Nigerian broking firms who trade on stocks to get listed and also trade on their shares. She went on to suggest that rather, these firms should raise money from the public and establish corporate establishments using different names that would be forwarded to Nigerian stock exchange for council. She also disclosed her fear on the fate of brokerage firms that deal on small investors, as this will cause their closure since the Nigerian federal ministry of finance has an aim of reducing the about 208 brokerage firms to 100. The Director-General noted that no company will be forced by the Nigerian stock exchange to merge or acquire another company as was the case in the banking sector. But she warned that companies that does not meet the deadline as stipulated by the ministry of finance will have her license revoked.

The Federal Government is set to make fresh reduction in the cost of transactions on the Nigerian Stock Exchange (NSE) in a bid to sustain the remarkable growth of the market and also make it internationally competitive.
The move is coming against the backdrop of last years’ reduction of 40 per cent in all capital market fees for both primary and secondary market transactions by the Federal Government.
Mr. Lanre Oloyi, head of media of the commission, disclosed yesterday that the apex regulatory body of the market has already set up an in-house committee to work out the details of the reduction.
Oloyi said, “We are going to further bring down the cost of transactions in the market in order to sustain the recent remarkable growth of the market to attract foreign investors and make it internationally competitive.”
He explained that as soon as a draft of the new fees is ready it would be exposed to other stakeholders in the market in a bid to accommodate their contributions before the commission would seek Federal Government’s approval for its implementation.
The Federal Government had in April 2007 effected a 40 per cent reduction in the cost of transactions in the market.  
The reduction was the culmination of industry-wide efforts at ensuring that the domestic capital market is made more competitive to attract both local and foreign investments into the country.
A committee set up by Sec to review transaction costs in the capital market based on stakeholders’ observation showed that the Nigerian capital market has one of the highest fee structures in the world.
Under that arrangement, an equity’s average transaction cost in the primary market, which stood at 6.92 per cent then was reduced to 4.32 per cent while transaction cost on bonds was reduced from 7.03 per cent to 4.79 per cent.
In the secondary market, total transaction costs on equities were reduced such that equities transaction cost on the buy side was reduced from 4.07 per cent to 2.36 per cent while on the seller’s side it is now 2.65 per cent from 4.12 per cent. The new fee regime became effective from April 24, 2007.
High transaction cost is one of the major problems affecting the Nigerian capital market, despite the high level of returns being made by investors in the market. 

The Central Bank of Nigeria (CBN), has emphasised that foreign investors will not be exempted from complying with the Federal Government’s policy on N25 billion minimum capital for any bank operating in Nigeria.
Mr. Festus Odoko, head of corporate affairs, CBN, said yesterday that foreign investors are fully permitted to invest in existing Nigerian banks provided they meet the minimum capital requirement and other regulatory conditions for procuring a banking licence as stipulated by the apex bank.
According to the CBN, any foreign individuals or institutional investors could also invest in existing Nigerian banks.
However, Odoko noted that there is a condition that no single foreign individual or institutional investor should acquire more than the share of the single largest Nigerian individual/institutional investor in any bank. The condition remains, provided the aggregate shareholding of the foreign investors do not exceed 10 per cent of the total capital of the bank.
Mr. Alderman Lewis, the Lord Mayor of London, was quoted during his recent visit to Nigeria, as saying that the Nigerian government is not opening up its banking system to foreign competition.
The CBN said there is need to explain the position of government following the comments credited to the United Kingdom representative.  Under the present condition for operation in the country’s banking system, the apex bank states that foreign banks could acquire or merge with a local bank existing in Nigeria.
Such a foreign bank, according to CBN’s policy, however, must have operated in Nigeria for at least five years and established branches in at least 2/3 of states of Nigeria excluding the state capital.
The CBN equally stipulates that the foreign bank or investors’ shareholding arising from the merger or acquisition of a local bank does not exceed 40 percent of the total capital of the resultant entity.
The apex bank clarified that existing shareholding structure of Nigerian banks in which there are foreign interests in excess of 10 per cent might subsist but such foreign interest should not exceed the current level.

Mr. Wale Tinubu, group chief executive of Oando Plc, has said the company would realise about N30 billion from a planned offer for sale of 49 per cent of Oando Marketing, one of the major divisions of the company.
Tinubu disclosed this to journalists after the 31st yearly general meeting of the company held in Lagos yesterday.
He said the offer for sale would be concluded within 90 days after which Oando Marketing would be listed on the Nigerian Stock Exchange (NSE).
The Oando group is made up of five major divisions: Oando Marketing, Oando Trading, Oando Gas and Power, Oando Energy Services and Oando Refinery
Oando last year completed the corporate restructuring of the group by making Oando Marketing a wholly owned subsidiary.
The shareholders of the company at the meeting authorised to directors to sell a maximum of 49 per cent of the company’s shareholding in Oando Marketing on terms, conditions and dates to be determined by them (directors), agreed with the issuing house and approved by the regulatory authorities.
Major General Muhammed Magoro, chairman of the company said “Our restructuring was premised on the need to ensure our businesses can deliver maximum returns to all its shareholders and also derive from synergies from each other.”
Dr. Faruk Umar, a shareholder of the company while commenting on the 2007 results and accounts of the company had suggested to the board that existing shareholders should be given preferential treatment in the planned offer for sale.