The NASD OTC market closed the year 2014 with a nominal value of N41bn and total market capitalisation of N590bn. Total number of issued shares that can trade on the market is therefore 83 billion shares. Dematerialisation levels were still low at 2.05bn shares or 2.48 per- cent. “We expect that this will increase significantly as shareholders become more aware of the safety and liquidity advantages of dematerialisation,” said Bola Ajomale, managing director, NASD plc. He added: “During our first six months of operation in 2013, we focused our efforts on the structures that will support a robust OTC market (such as processes, on-boarding participants and developing rules). In 2014, we started to load up the securities that will trade on the market. “We migrated market trades from our Bi-lateral interdealer trading system (BITS) to the NASDAQ OMX X-Gen platform.
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The former platform is now free to be used for other asset classes that we shall roll-out in 2015.” While reviewing the NASD OTC market for 2014 and the expectation for 2015, Ajomale said 120 million shares worth N2.32bn were ex- changed in 417 deals by investors on the NASD OTC Market from January to December 2014, compared to 239,165 shares worth N76m that were exchanged in 34 deals from July to December 2013. “The market continues to grow in size and intensity each quarter of the year.
This reflects improved investor confidence in the OTC market and better understanding of the market on the part of brokers,” he added. Of the 86 participating institutions, 37 had traded on the NASD OTC market by the end of 2014. The top five traders accounted for 62.9 percent of total market activity while the top 15 participating institutions accounted for 93.6 percent of market activity. “We understand that some of the institutions are still developing trade competence for the OTC market,” Ajomale said. “In 2015, we anticipate growth and expansion in number of securities trading, volume of dematerialised securities, number of participating institutions, turnover volume and value, and product line,” he added. “We started the market with equity, we anticipate growth in the equities market and we also anticipate the introduction of other asset classes for trading on our platform. “We are going to build more relationship with all the participants in the market, including the shareholders of all un- listed companies; this will increase the level in the number of trades as well as dematerialisation. We will promote awareness and extend knowledge to shareholders to ease their participation in the OTC market through their brokers,” he told journalists yesterday.
