FAQ


Who is FSDH Securities?

FSDH Securities Limited (FSDH Sec) was formerly named Counters Trust Securities Limited (FSDH Securities), is a Dealing Member of The Nigerian Stock Exchange and is registered with the Securities & Exchange Commission as a Broker / Dealer and Issuing House. FSDH Sec has an authorized share capital of N500 million and a paid-up share capital of N275 million. Over the last ten years, FSDH Securities has firmly established itself as one of the major players in the stock market; providing high quality services to individual and institutional clients whilst upholding the highest standards of business ethics, integrity and professionalism.

What is the relationship between FSDH Securities and FSDH?

FSDH Merchant Bank was instrumental to the establishment of FSDH Sec. In 2004, FSDH Asset Management Limited, (FAML) a fully owned subsidiary of FSDH Merchant Bank, acquired majority shareholdings in FSDH Securities. With the acquisition, FSDH Sec became a direct subsidiary of FAML and an indirect subsidiary of FSDH Merchant Bank. Prior to the acquisition, FSDH Merchant  had provided FSDH Sec with financial, technical, research and managerial support. The acquisition will further consolidate on the technical support hitherto received from FSDH Merchant Bank, with clients benefiting from the synergy to be derived therein.

What makes FSDH Securities stand out amongst its peers?

FSDH Sec was set up to bolster the range, depth, expertise and quality of service currently available in the Nigerian capital market. This it does by: 
  
(a)  Offering its clients professional investment advice based on the experience of its staff in the capital market and rigorous in-house research and analysis
  
(b) Making use of the latest technology available to enhance response time and ensure a service delivery that is of a very high standard. Such as ability to track account statement details and portfolio valuation on our E-payments, E-mandate, E-options, E-contract notes, E-valuation.
  
(c) Offering new products and services tailored to suit the investment requirements of an increasingly sophisticated investing public. 
  
(d) Actively trading in securities in the secondary market (i.e. equity and debt instruments) and providing easy entry and exit for both local and foreign portfolio investors desiring to participate in stock market activities. 
  
(e) Upholding the highest standards of business  ethics, integrity and professionalism.

What products/ services does FSDH Securities offer? 

Our services are as follows:
1. Dealing Service. 
2. Stockbroker to Primary Market Issues. 
3. Stock Market Advisory Services. 
4. Receiving Stockbroker to New Primary Market Issues. 
5. Financial Advisory/Issuing House Services. 
6. The FSDH Sec Share Backed Account.
7. The FSDH Sec Trading Account.
  
As part of these services, we have designed the following products for investors in the stock market: 
  
1. Personal Equity Plan [F-PEP] 
The FSDH Sec Personal Equity Plan [C-PEP] is designed to help the discerning investors create and maximize their wealth.

2. FSDH Family Equity Plan [C-FEP] 
The FSDH Family Equity Plan is designed to help parents create and build up wealth for future use by the family. 
 
3. FSDH Bull Account
The FSDH Bull Account [F-B Account] is designed solely for High net worth individuals and institutions.

4. FSDH Equity Trading Account
The FSDH Equity Trading Account [F-ETA] is structured to cater for investors whose main investment motive is to achieve superior capital gains.

What is a Stock Exchange?

A Stock Exchange is an organized market for trading of securities, i.e. shares (or equities), government and corporate bonds, and their derivatives. The Nigerian Stock Exchange has eight branches situated in Lagos Head Office, Abuja, Ibadan, Onitsha, Port Harcourt, Kaduna, Kano, Benin and Yola.

What are shares, stocks and bonds?

Shares or stocks represent ownership rights in companies. In other words, those who own the shares of a company own the company. Depending on the nature of the company, the shareholders accept limited or unlimited liability for losses borne by a company. In the case of a limited liability company, the liability of shareholders is limited to the contribution made when purchasing the shares. On the other hand, in the case of an unlimited liability company, the liability of shareholders to cover the losses of a company is not limited to the contribution made by shareholders via the purchase of the shares held. In this case, liability extends to the personal property of shareholders. Likewise, shareholders own all excess profits made by a company after obligations such as corporate tax and loan obligations have been serviced. It is important to note that all companies listed on the stock exchange are limited liability companies.

How do I invest in the Nigerian Stock Market? 

Opportunities to buy shares exist via two channels, i.e., by:
 
a. Investing through public or private offers of new or existing shares- Several quoted and unquoted companies as well as the different tiers of government offer shares or stocks to the public to fund development and other projects. In the case of public offers, the securities are advertised in the print and/or electronic media and application forms are made available through stockbrokers, such as FSDH Sec, banks and other avenues. In the case of private offers, the shares are not advertised to the general public but are offered to a selected number of prospective investors. Investors subscribe to these offers by filling out an application form and attaching payment for the securities they wish to purchase. Subsequently, the issuing house to the public or private issue of the security processes all applications and allots shares to subscribers in accordance with agreed criteria. Certificates are then sent to successful subscribers and serve as evidence of ownership. Shareholders may trade these certificates in the future. Meanwhile, cheques for the amount paid for subscriptions are mailed to unsuccessful subscribers.
 
b. Buying securities on the Stock Exchange - Investors may purchase shares on quoted securities in The Nigerian Stock Exchange. Investors can only buy shares through agents called stockbrokers, such as FSDH Sec. Investors are advised to contact stockbrokers who would provide the necessary documentation to open an account with the Central Depository. Subsequently, investors should discuss their orders with the stockbroker who would then purchase the shares.

What are the charges for buying and selling shares in the Nigerian Stock Market?

The following are the statutory charges for the purchase and sale of shares on The Nigerian Stock Exchange:



Purchases
  RATES VAT TOTAL
Brokers Commission 1.35% of Consideration 5% of Brokers Commission (or 0.0675% of Consideration) 1.4175% of Consideration
SEC Fees 0.3% of Consideration Nil 0.3% of Consideration
CSCS Fees 0.06% of Consideration 5% of CSCS fee (or 0.003% of Consideration) 0.063% of Consideration
Stamp Duties 0.075% of Consideration Nil 0.075% of Consideration
TOTAL     1.8555%

Sale
  RATES VAT TOTAL
Brokers Commission 1.35% of Consideration 5% of Brokers Commission (or 0.0675% of Consideration) 1.4175% of Consideration
NSE Fees 0.5% of Consideration 5% of NSE fee (or 0.015% of Consideration) 0.315% of Consideration
CSCS Fees 0.36% of Consideration 5% of CSCS fee (or 0.018% of Consideration) 0.378% of Consideration
Stamp Duties 0.075% of Consideration Nil 0.075% of Consideration
TOTAL     2.1855%

Consideration refers to the value of the shares purchased.

What are the returns from investing in shares? 

Returns from investing in shares are:
  • Cash Dividends - This refers to periodic payments made by the companies to their shareholders, usually at the end of the companies' financial year. Some companieas also pay interim dividends before their formal year end. The payments are made to all shareholders listed in the companies' register of members as at a particular date called the company's closure date. However, it is important to note that the stock exchange adjusts the share price of the company for this payment. For instance, if a company declares a dividend of N0.50 per share, the company's share price would be adjusted downwards by N0.50 on the company's closure date.
  • Bonus/Scrip Shares - This refers to the issue of new shares by companies through the conversion of a portion of their capital and/or revenue reserves to shares. The new shares are then distributed amongst shareholders who are listed in the company's register of shareholders as at a particular date known as the company's closure date.
  • Capital Gains - This refers to the appreciation in a company's share price on the stock exchange.

 

 

What is the ATS?

The ATS refers to the Automated Trading System of The Nigerian Stock Exchange. The system became operational in April 1999 and replaced the call-over trading system. Automated trading refers to a procedure whereby dealers on the trading floor of the stock exchange enter buy and sell orders for shares into an electronic trading system. The trading system is designed to generate trades automatically when selling and buying prices match.

What is the CSCS?

CSCS is an acronym for the Central Securities and Clearing System Limited, the Company that provides central clearing services for dealers that trade on The Nigerian Stock Exchange. It was incorporated in 1997 and has since provided central clearing services for investments in The Nigerian Stock Exchange. Central clearing refers to a process whereby the registration, clearing, settlement and delivery processes are centralized thereby reducing the cost and time involved in processing trades on the stock exchange.

What is dematerialisation?

Dematerialization is an offshoot from the application of central clearing. It is a central process where the registration of shares is handled by a computer without a share certificate having to be issued by the company.

What is demobilisation?

Demobilization refers to the lodging of share certificates with the central depository with the understanding that the shares would be immobilized and can therefore not be withdrawn. Therefore, subsequent trades on the immobilized shares would only lead to the transfer of units of the shares from the account of the seller to that of the buyer electronically.

What is a unit trust?

A system where money from a number of investors, is pooled together and invested collectively in investments such as shares and bonds. Each investor owns a unit, (or a number of them) the value of which depends on the value of those items owned by the fund. A unit trust allows modest investment to be diversified away from a holding in a single or small number of companies. It gives the combined benefits of diversification, security and a sufficient weight of assets to ensure cost-effectiveness and merit the attention of leading fund managers. The trustee is normally a major bank and is the legal holder and custodian of the securities.

Who is a stockbroker?

A stockbroker is a firm or person who buys and sells securities on behalf of investors for a commission called "brokerage". The Stock Exchange regulates the commission charged.

What are bonds and debentures?

Bonds and debentures are debt instruments usually issued for a period of more than one year with the purpose of raising capital by borrowing. They are legal documents representing a promise by the company or by Government (in case of a bond) to pay certain amount of interest over a definite period of time.

Who can buy shares?

Anyone who is 18 years and above qualifies to buy shares in Nigeria. Parents who want to buy shares for their wards are supposed to buy such shares in their own names and later transfer them to the children when they attain the legal age of 18 by nominal transfer.

Can shares be transferred?

Yes, an investor may transfer shareholdings to a relation, where they bear the same surname the transfer is known as nominal transfer. Even in the case of a dead shareholder, his shares can be transferred to his children or sold as the case may be. To effect this transfer the investor should contact his broker.

What does "Xsc" means?

Xsc is a financial expression for "without the scrip". A stock that is purchased during the without the scrip period will not earn a scrip/bonus declared in that period for its new owner.

Who do I approach when I have problems with a share certificate or dividend?

The Registrar of the Company.

Who is a registrar and what are their duties?

A registrar in common parlance is a keeper of records in respect of quoted stocks and shares.

  • They act as agents to the company who appoints them.
  • Register the shares and the names of the owners in the member register
  • Prepare share certificates and send them to the registrars

What is the second tier securities market?

The 2nd tier securities market was introduced to assist small and medium sized companies that are unable to meet the requirements of the first-tier market in raising long-term capital.

What is Clearing House Number?

This is the Clearing House Number assigned to every shareholder at the first point of entry into CSCS system by completing CSCS - R005 shareholders particulars. Shareholders are to [provide the same CHN to all subsequent stock broking firms they have transactions with for ease of reference.

Can an investor change from one broker to another?

Yes, an investor can change from one stock broking firm to another. To effect the change please contact your broker.

What is the relationship between The NSE and CSCS?

CSCS is a subsidiary of the NSE, but an independent company. All shares to be traded on The NSE floors must be deposited with the CSCS while CSCS does clearing and settlement of trades for The NSE.

Can an investor use his stockholding in CSCS as collateral?

Yes by pledging them to the lender via a lien or memorandum of deposit.

Market updates - 28 Jul, 2014
Top Loser
SecurityLossPrice
TOTAL -9.28 176.45
MOBIL -8.49 161.41
FO -8.23 216.00
Market updates - 28 Jul, 2014
Top Gainer
SecurityGainPrice
WAPCO 1.68 118.95
STANBIC 1.59 29.09
CCNN 0.90 14.17

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