"For instance, there was an insurance company that declared N3 per share dividend. It then went back to its issued capital to discover that it could not sustain the dividend. It then reduced the payout from N3 to N2, from N2 to N1 and from N1 to half kobo within the same period. So, it is time to look at the issue of reconstruction of shares very seriously. So, what we are saying is reset the clock, reset the exchange. The exchange has exploded the number of shares because nobody thought about the consequences of consolidation. If I have my way, I would have told everybody to reconstruct by a factor of 10; so a person who has 30 shares before will now have 3, the person with 29 will have 2.9 and the person with 18 shares will then have 1.8 shares."

Any one who understands mathematics would know that this is senseless calculations.
In an event of share redomination, the EPS should also increase by 50% as the share volume would reduced by 50%. Also, share prices of 50k per unit of share must also increase by 50% to add up to N0.75k and not N1 as earlier proposed by Ndi Okereke-Onyiuke.
The important thing is that when shares of N0.5k per unit is adjusted to N1.00k per unit, share volume, prices and EPS must also reflect 100% increase so as not to rob shareholders of their investment.
The equation for N0.50k per share to N1.00k per share is 100% increase
Share volume decrease of 50%.
Share price increase of 100%.
EPS increase of 100%
Any thing besides this is fraud.






http://www.ngrguardiannews.com/business/article01//indexn3_html?pdate=160809&ptitle=Stock%20Exchange%20To%20Reduce%20Shares%20Held%20By%20Individuals%20By%2050%20Per%20cent%20&cpdate=160809


Stock Exchange To Reduce Shares Held By Individuals By 50 Per cent
By Godfrey Okpugie

QUOTED companies, which issued large volume of equities to raise huge funds from the capital market to enable them do business in an economy bedeviled by inflation and devalued currency, are now faced with the consequence of paying huge dividends to their shareholders. To address this problem, the Nigerian Stock Exchange (NSE) is considering shrinking the number of shares held by individual shareholders by 50 per cent.

The Guardian gathered that the reduction is going to be carried out through share re-nominalisation; that is, the current nominal value of 50 kobo per unit of share would be jerked up to N1. In effect, a person who had 400 shares of 50 kobo each would now have 200 units at N1 each.

Prior to 2004, the capital market rarely witnessed a company issuing equities in volume of billions. But the introduction of banks consolidation exercise in 2005 by the Central Bank of Nigeria (CBN), compelled banks to invade the market with billions of new shares to raise the N24 billion capital base the apex bank directed each of them to have. Thereafter, the insurance companies also rushed to the market with billions of new shares to raise funds to shore up their capital base. And because of the large sum of money needed to effectively do business in the country as a result of inflation, devalued currency and acquisition of alternative power, many companies, which have come to market of late increased the number of new shares issued to enable them garner adequate funds.

Following this development, the number of equities in the capital market went up astronomically.

Worried by the inability of many listed companies to service the volume of their shares through dividend pay out, concerned capital market operators have mounted pressure on the Nigerian Stock Exchange (NSE) to shrink the number of shares by as much as 10 to one.

Towards this end, the Director General of NSE, Prof. Ndi Okereke-Onyiuke, has mandated the Managing Director of National Sports Lottery (NSL), Dr. Odunlami Kola-Daisi, who is one of the people spearheading the re-nominalisation to begin public enlightenment on the issue.

Kola-Daisi had consistently expressed concern about the inability of financial services industry to service their deluge of shares after consolidation. He declared at a recent capital market forum that the financial services industry was responsible for the 70 per cent of the market, pointing out that in 2005, the volume of shares in the banking sector was 29 billion; but that today, the number had gone to more than 400 billion shares. Insurance sector, which had 9.7 billion, now has over 110 billion shares.

He said: "I don't believe that the financial sector is strong enough to service about 500 billion shares in the market. For instance, there was an insurance company that declared N3 per share dividend. It then went back to its issued capital to discover that it could not sustain the dividend. It then reduced the payout from N3 to N2, from N2 to N1 and from N1 to half kobo within the same period. So, it is time to look at the issue of reconstruction of shares very seriously. So, what we are saying is reset the clock, reset the exchange. The exchange has exploded the number of shares because nobody thought about the consequences of consolidation. If I have my way, I would have told everybody to reconstruct by a factor of 10; so a person who has 30 shares before will now have 3, the person with 29 will have 2.9 and the person with 18 shares will then have 1.8 shares."

Okereke-Onyiuke assured that the NSE would soon adjust the nominal value of shares from 50 kobo to N1, saying, "it doesn't make any difference, adding that before the re-nominalisation, the Exchange would first do a lot of public enlightenment.

She said the NSE would not do it alone; it will carry the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC) along.

Commenting on the issue, Mr. Sonny Nwosu, President of Nigerian Shareholders Association, said it is a welcomed development as the exercise would not affect the value of the shares only, but reduce the number of shares held by individual investors by 50 per cent.


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the nigeria stock market is not too old to have overcame all stock market challenges

To old to be true. Events have overcome this.