₦airaland Forum

mikeapollo:
A pre-funded market is much better as it helps reduce liquidity risk in the market, which helps to boost market confidence.
The FTSE Russell review should lead to an improvement in the classification of NGX, unless they are up to something else.

isaacosas01:
People keep asking “how can faster settlement be bad?” Let me explain.

When a foreign fund wants to buy NGX stocks, they don’t have naira sitting somewhere. They wire dollars, their custodian converts to naira through CBN FX window, THEN they buy shares.

Under T+2, they had 2 days to sort that FX conversion. Manageable.

Under T+1, they have to fund the trade same day. Our FX market cannot deliver large naira amounts same-day consistently. So what happens? They have to convert dollars to naira BEFORE any trade is even placed and just leave it sitting there on standby.

That is called prefunding. And that is the problem.

Why would any serious fund hold naira? Every day you sit in naira waiting to deploy, you are bleeding in dollar terms. Before you buy a single share, you are already losing.

FTSE Russell issued a notice yesterday because of this putting Nigeria’s Frontier Market reclassification on HOLD. We were supposed to get that status in September 2026, which would have triggered automatic buying from global index funds. That money is now on hold.

We copied T+1 from USA and India without copying the part that makes it work for them — a deep FX market where you can source local currency instantly.

We put the cart before the horse. We need to fix the naira liquidity problem first.

megawealth01:
If you haven't received your OWN cash settlement, the chances of you getting the new shares might be high sha just use wisdom and prayer to follow the registrar and your broker... Sha don't fill any e-mandate form trick from the registrar if you do na you sabi sha

isaacosas01:
People keep asking “how can faster settlement be bad?” Let me explain.

When a foreign fund wants to buy NGX stocks, they don’t have naira sitting somewhere. They wire dollars, their custodian converts to naira through CBN FX window, THEN they buy shares.

Under T+2, they had 2 days to sort that FX conversion. Manageable.

Under T+1, they have to fund the trade same day. Our FX market cannot deliver large naira amounts same-day consistently. So what happens? They have to convert dollars to naira BEFORE any trade is even placed and just leave it sitting there on standby.

That is called prefunding. And that is the problem.

Why would any serious fund hold naira? Every day you sit in naira waiting to deploy, you are bleeding in dollar terms. Before you buy a single share, you are already losing.

FTSE Russell issued a notice yesterday because of this putting Nigeria’s Frontier Market reclassification on HOLD. We were supposed to get that status in September 2026, which would have triggered automatic buying from global index funds. That money is now on hold.

We copied T+1 from USA and India without copying the part that makes it work for them — a deep FX market where you can source local currency instantly.

We put the cart before the horse. We need to fix the naira liquidity problem first.

isaacosas01:
NO! Capital NO! A pre-funded market is very BAD.
A requirement to prefund equity trades is deemed a negative for the Settlement Cycle (DvP) criterion.

For those who don’t know DvP means Delivery versus Payment — the global standard where cash and shares move simultaneously at settlement. No advance funding needed. Nigeria just broke that standard for foreign investors.

If we don’t solve this we would NEVER get on FTSE Russell

isaacosas01:
People keep asking “how can faster settlement be bad?” Let me explain.

When a foreign fund wants to buy NGX stocks, they don’t have naira sitting somewhere. They wire dollars, their custodian converts to naira through CBN FX window, THEN they buy shares.

Under T+2, they had 2 days to sort that FX conversion. Manageable.

Under T+1, they have to fund the trade same day. Our FX market cannot deliver large naira amounts same-day consistently. So what happens? They have to convert dollars to naira BEFORE any trade is even placed and just leave it sitting there on standby.

That is called prefunding. And that is the problem.

Why would any serious fund hold naira? Every day you sit in naira waiting to deploy, you are bleeding in dollar terms. Before you buy a single share, you are already losing.

FTSE Russell issued a notice yesterday because of this putting Nigeria’s Frontier Market reclassification on HOLD. We were supposed to get that status in September 2026, which would have triggered automatic buying from global index funds. That money is now on hold.

We copied T+1 from USA and India without copying the part that makes it work for them — a deep FX market where you can source local currency instantly.

We put the cart before the horse. We need to fix the naira liquidity problem first.

SonofElElyonRet:
Also current Japaul chairman
There's this invisible link between Japaul and Chams

ppogba:
They are yet to be paid because the Registrar, unity registrar claim they do not have their accounts details. My wife and I have Unity Bank Shares. I was paid, she was not paid. With the help of the information provided on this platform, she called them and an a form was sent to her to fill. This she has done and yet to be paid.
I am not totally against what you said but at the same time, it could also mean his funds being idle somewhere without being used.
When I shakara the registrar that why should they pay me, they asked me whether I indicated my preference for the shares by filling the form they sent. Na so Apa j'abo.

Meerahbel:
This is a valid concern, but I don't think T+1 is necessarily the problem.

Faster settlement is the direction every serious capital market is moving toward because it reduces counterparty risk, improves market efficiency, and lowers settlement failures. Nigeria cannot postpone modernization indefinitely simply because other parts of the financial system are still developing.

The real issue isn't T+1—it's the FX market. If investors struggle to access naira on demand, they would face that challenge under T+2 as well. T+1 simply exposes a weakness that has existed for years.

In fact, introducing T+1 could pressure regulators and market participants to improve FX liquidity, settlement infrastructure, and funding mechanisms faster. Waiting until everything is perfect before modernizing may only delay reforms.

Also, FTSE Russell placing Nigeria's reclassification on hold doesn't automatically mean T+1 is a mistake. Their review considers overall market accessibility, including FX availability, capital mobility, and operational efficiency. T+1 is just one part of a much larger picture.

The better solution isn't to abandon T+1. It's to strengthen the FX market, improve intraday liquidity, expand securities lending and financing, and ensure foreign investors can access naira efficiently. Once those pieces improve, T+1 becomes a competitive advantage rather than a disadvantage.

So the debate shouldn't be "T+1 or T+2." It should be how quickly Nigeria can build the supporting infrastructure that allows T+1 to work as intended.

SonofElElyonRet:
Also current Japaul chairman
There's this invisible link between Japaul and Chams

4willer:
Also Chairman of Greenwich Merchant Bank.

What a huge role.
.

searchng4love:
What is happening with DMA this morning..... Bears have come to stay.... No matter how restricted the access is... it's a bear season

deathwing:
Nobody is taking note. Buy it all by yourself.

deathwing:
Nobody is taking note. Buy it all by yourself.

yMcy56:
This also cracked me up 🤣
Bargainer hunters don vex 😁

mikeapollo:
FTSE Russell can go to blazes! The NGX rules are not meant for only FTSE Russell.
Now, ask yourself this fundamental question: Between T+2 and T+1, which one is better for market liquidity, and investor confidence?
T+2 and T+1 are the preferred trading cycles in most global exchanges, so what is different with NGX opting from T+2 to T+1?

otomatic:
I've learnt a lot from this explanation.

If they have deep-pocket brokers, can't the brokers give them some form of bridge financing pending the conversion of fx? They can even do it at minimal or no charge depending on the volume of transactions.

How come the regulators did not even consider this?

faoogoke:
Access Bank, CBN’s ‘FHC Draft’, and the dividend puzzle

The Central Bank of Nigeria’s (CBN’s) June 2026 draft guideline on Financial Holding Companies has reignited debate around bank dividends, capital buffers, and the structure of banking groups. At the centre of this is Access Bank/Access Holdings, whose management has repeatedly stated that it has resolved all regulatory restrictions except the 10 percent foreign subsidiary investment limit. Understanding the dividend outlook requires separating three distinct issues: structural compliance, forbearance, and CBN verification.

Structural compliance: The 10% rule is resolved

For years, Access Bank Plc breached Section 19( of BOFIA, which limits a bank’s investment in foreign subsidiaries to 10 percent of shareholders’ funds. Access expanded aggressively across Africa, and by FY2025 its international operations accounted for 33 percent of loans, 23 percent of shareholders’ funds, and 52 percent of PBT [profit before tax]. At its AGM [annual general meeting], the chairman stated that foreign subsidiaries are now “already sitting at the FHC,” meaning that Access Holdings, not Access Bank Plc, owns them. The June 2026 draft formalizes this by allowing FHCs to hold foreign subs directly and ring-fence the Nigerian bank. Management was also given a 12-month window to remediate the position. By this metric, Access has exited the structural restriction. The comment that “the money to pay is sitting at the FHC” reflects the cash raised from the 2024 rights issue and earnings from non-bank subsidiaries like ARM Pensions and Access Insurance.

he forbearance block: Cash, not structure
However, the bigger barrier to dividends was never the 10 percent rule alone. In February 2024, CBN issued a circular suspending dividends, bonuses, and foreign investments for banks under regulatory forbearance until they exited forbearance and were independently verified as compliant. Forbearance allowed banks to classify large ‘Oil & Gas loans’ as “performing” despite stress. When forbearance expired in Q1 2026, peers like United Bank for Africa (UBA), First Bank of Nigeria (FBN), and Ecobank saw NPLs [Non-Performing Loans] jump above 10 percent as those loans were reclassified. Access Bank was the outlier with NPL at 2.5 percent, indicating it had provisioned more aggressively or had a cleaner book. This means Access has technically exited forbearance, removing the primary regulatory block that CBN tied to dividend suspension.

The new 20% HoldCo buffer and CBN verification
The June 2026 draft adds a new condition: FHCs must maintain a minimum 20 percent capital buffer above the Nigerian bank’s CAR [capital adequacy ratio]. This buffer must be held at the HoldCo level and cannot be lent back to the bank. It is designed to ensure the HoldCo can absorb shocks from foreign subsidiaries without destabilising the domestic bank. Access Holdings may need additional capital to meet this, but the cash from prior raises suggests it is better positioned than peers. Still, CBN’s last directive remains: dividends are suspended “until such a time as forbearance is fully exited and capital adequacy is independently verified.” Even with forbearance expired and structure fixed, CBN examiners must verify cash provisioning and CAR compliance before lifting the ban. No new circular has done this yet.

mplications for Access and shareholders
The dilution and dividend impact differs by bank. Zenith needs minimal capital and will see the least EPS/dividend hit. Access already diluted shareholders in 2024 and faces moderate dilution now, but its low 2.5 percent NPL puts it first in line for dividend resumption. FirstHoldCo and UBA face higher dilution and dividend risk due to larger capital gaps and NPL shocks. Analysts like Renaissance Capital still forecast 2028 for Access to resume dividends, but that assumes slow provisioning. With forbearance expired and NPL at 2.5 percent, Access could be approved earlier if CBN verification is swift.

Conclusion

Access Bank has solved the structural problem: foreign subsidiaries are at the HoldCo and the 10 percent rule is resolved by the new draft. It has also solved the asset quality problem: forbearance expired and NPL is lowest among FUGAZ. What remains is CBN’s verification of cash capital and provisioning. The chairman and the managing director are correct that the money exists at HoldCo, but CBN rules prevent the bank from upstreaming dividends until formal sign-off. Once CBN confirms compliance, Access Bank Nigeria can pay dividends to Access Holdings, which can then pay shareholders. The timeline is now in CBN’s hands, and Access is best positioned among its peers to be the first to resume payouts.

mikeapollo:
FTSE Russell can go to blazes! The NGX rules are not meant for only FTSE Russell.
Now, ask yourself this fundamental question: Between T+2 and T+1, which one is better for market liquidity, and investor confidence?
T+2 and T+1 are the preferred trading cycles in most global exchanges, so what is different with NGX opting from T+2 to T+1?

sterlingD:
UNIVERSITY PRESS PLC
https://doclib.ngxgroup.com/Financial_NewsDocs/47299_UNIVERSITY_PRESS_PLC.-_QUARTER_5_-_FINANCIAL_STATEMENT_FOR_2026_FINANCIAL_STATEMENTS_JUNE_2026.pdf

Dividend: 18kobo

LEARN AFRICA PLC
https://doclib.ngxgroup.com/Financial_NewsDocs/47311_LEARN_AFRICA_PLC-_QUARTER_5_-_FINANCIAL_STATEMENT_FOR_2026_FINANCIAL_STATEMENTS_JUNE_2026.pdf

Dividend: 35kobo

chimex38:
I recall this.
I think it was Fitch, moody and these foreign renowed credit agencies that were downgrading Africans financial institutions and companies like African EXIM bank with low and poor credit ratings.
Making it difficult for Africa financial and business institutions to access more international funds an contracts and African businesses pay more interest on borrowed funds.

So Africa decided to initiate and create it's own Credit rating agency by Africans for Africans called Africa Credit Rating Agency-AFCRA that fairly rates African businesses and finance firms.
Since then it has boosted African chances of securing funding, contracts, fair borrowing rates and other influence with the rest of the world.

Meerahbel:
This is a valid concern, but I don't think T+1 is necessarily the problem.

Faster settlement is the direction every serious capital market is moving toward because it reduces counterparty risk, improves market efficiency, and lowers settlement failures. Nigeria cannot postpone modernization indefinitely simply because other parts of the financial system are still developing.

The real issue isn't T+1—it's the FX market. If investors struggle to access naira on demand, they would face that challenge under T+2 as well. T+1 simply exposes a weakness that has existed for years.

In fact, introducing T+1 could pressure regulators and market participants to improve FX liquidity, settlement infrastructure, and funding mechanisms faster. Waiting until everything is perfect before modernizing may only delay reforms.

Also, FTSE Russell placing Nigeria's reclassification on hold doesn't automatically mean T+1 is a mistake. Their review considers overall market accessibility, including FX availability, capital mobility, and operational efficiency. T+1 is just one part of a much larger picture.

The better solution isn't to abandon T+1. It's to strengthen the FX market, improve intraday liquidity, expand securities lending and financing, and ensure foreign investors can access naira efficiently. Once those pieces improve, T+1 becomes a competitive advantage rather than a disadvantage.

So the debate shouldn't be "T+1 or T+2." It should be how quickly Nigeria can build the supporting infrastructure that allows T+1 to work as intended.

Oasisblue:
Beautiful Turnaround story from PZ. Impressive.

guyzgirl:
The difference is you opting for what you have the infrastructure to handle. What they have effectively done is import a problem into the NGX and make the infrastructure gap which was being side-stepped by the t+3 settlement system evident.

With regards to the question around bridge financing, it is important to remember that transactions on the NGX are already pricy at above a minimum of 2% for a round trip transaction, most of these fees going to regulators. A bridge finance is added cost, because no one would provide that for free.

On a final note, we need to understand that we need foreign investors to deepen the equity market, if not we would never see some liquidity, valuations and listings we have been dreaming about, a $1trn economy is not achievable using only local capital.

In retrospect, this might be one of the greatest contributors to the blood on the dance floor. With foreign investors yet to figure out how to trade seamlessly, they would simply pull out capital. Run first and figure it out later.

Oasisblue:
Beautiful Turnaround story from PZ. Impressive.