Investor Protection Efforts by the NSE Presented By Tinuade Awe - - PowerPoint PPT Presentation

Investor Protection Efforts by the NSE

Presented

By

Tinuade Awe Head, Legal and Regulation Division

To the Investors Clinic for Registered Shareholders’ Associations MARCH 19, 2014

1

• Introduction

2

• Key players of the market

3

• NSE’s Vision

4

• NSE’s obligations to investors

5

• NSE’s Initiatives for Investor Protection

6

• Investors Protection Fund

7

• Conclusion

| Contents |

| Key Players in the Market |

Broker-Dealers

• Bring issuers to the market;

execute buy/sell orders

• Enabling Framework: SEC

registration plus NSE license; CIS Act of 1992; ISA 2007, SEC Rules (2013), NSE Rules

Registrars

• Maintain registers of

company shareholders

• Enabling Framework: SEC

registration as a Registrar; ISA 2007 and SEC Rules (2013)

Trustees

• Maintain assets on behalf of

investors

• Enabling Framework: SEC

registration as a Trustee; ISA 2007; Trustee Investment Act 1962; SEC Rules (2013)

Investors/Participants

• Originate orders

Others

• Issuing houses, OTC

platforms, fund managers etc.

• Enabling Framework: SEC

Registration; ISA 2007 and SEC Rules (2013)

Custodians

• Maintain assets on behalf of

investors

• Enabling Framework: SEC

registration as a Custodian; ISA 2007 and SEC Rules (2013)

CSCS

• Sole provider of clearing and

settlement services

• Enabling Framework: SEC

registration as a CSD; ISA 2007 and SEC Rules (2013)

NSE (SRO)

• Enabling Framework: SEC

registration as an Exchange; ISA 2007 and SEC Rules (Nov 2012); NSE MEMART; NSE Rules

SEC (Apex Regulator)

• Maintains primary oversight
• f the capital market
• Enabling Framework: ISA 2007

and SEC Rules (2013)

| Investors|

| NSE’s Vision |

T

• be the leading Stock

Exchange in the African region for capital formation, driven by transparency , innovation efficiency and liquidity.

Strong Regulation and Supporting Regulatory Programs Growth enabling market structure 21st Century Technolog y Strategies 5 year Target $1tr Market Cap First rate Investor Protection strategies Targeted Listing and product efforts

| NSE’s Obligation to Investors|

• Transparency and integrity
• Information equity
• Rules and regulations
• Enforcement

|NSE Initiatives for Investor Protection|

Market Facing Investor Protection

Fund Transformation of Market Operators X-Alert X-Whistle

Rules and Regulations

Rule benchmarking and review Rules governing transactions on related parties

Local and Foreign Collaboration

Collaboration with law enforcement FSRCC IOSCO, US SEC ISG

Compliance

Inspection and Complaints Management Constant Disclosure Technology Market Surveillance Rules and Regulation Governing Dealing Members Rules relating to Board and General Meetings

• f Issuers

| |

|Investors Protection Fund (IPF) |

| X-Alert|

 Joint NSE/CSCS initiative  Provides investors with details of transactions on their accounts via SMS  Easy monitoring of accounts  Serves as an effective fraud alert in cases of unauthorized transactions on accounts  Reduction in time spent confirming trades  Enhancement of transparency between trader and clients  Improves confidence in the capital market  Notification of corporate information( Dividends, Bonuses, Payment Date, etc.) to clients via SMS

| Transformation of Market Operators|

• Manpower and equipment
• Organizational structure and governance
• Effective processes
• Global competitiveness
• Technology

| Technology|

Technology

• X-Issuer

Timely release of financial information to the market Greater transparency in information dissemination Greater market integrity with significant reduction of leakage of material information

• X-Monitor
• Electronically updates all material

information and can be called up when needed

• X-Gen

 High performance, robust, multi-asset, multi-market matching trading engine  Encourages wider participation of middle –class and investing segment  Enables investors to executive market

• rders on a wider range of devices

including smart phones

| Market Surveillance |

• Daily monitoring of trading activities in the market
• Creation and analysis of alerts for unusual trading

behaviour

• Preparation of surveillance reports on daily,

weekly, monthly and quarterly basis

• Conduct detailed research and generate evidence
• f market abuse.
• Conduct investigations on suspected market abuse
• Prosecute and seek sanctions in appropriate

circumstances

| X-Whistle|

• Whistle blowing portal for tips and referrals
• Anonymous and non-anonymous sources
• On-going engagement with source
• NSE review and determination

| Conclusion |

| Question and Answers |

Stock Exchange House 2 - 4 Customs Street P.O. Box 2457, Marina Lagos Island, Lagos, Nigeria tawe@nse.com.ng

Thank You

BASIC INVESTMENT PRINCIPLES

M A R C H 2 1 4

Presentation at the Nigerian Stock Exchange Investors Clinic for Registered Shareholders Associations

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

Peculiarities of Financial Products The Investment Process Why you need an “Investment Advisor”? Understanding “YOURSELF” as an investor

Outline

20

UBA Capital Group – The One-Stop Shop for your Financial Need Products and Services Investnow.com.ng

Understanding “YOURSELF” as an investor - The Age Factor

The age factor in investing – it helps to define who you are The young generation can accommodate more risk The middle age category has a balanced risk appetite Old investors should be discouraged from taking “excess risk” Even within asset classes, consider age in selecting specific asset

20’s 30s-40’s 40s-50’s 60’s+

Wealth accumulation stage Split savings into long- and short- term goals Think equities for long-term; “liquid” assets for short-term Growth is the target Consolidation stage Preparing for retirement Less appetite for risk, strong appetite for physical assets like real estate Increasing preference for income A fulfilled retirement Very low risk appetite Less energy Focus on stable income Fixed income products and realty are often the attraction A Starter Strong appetite and natural headroom for high risk Alternative income sources Less need for liquidity from investment 21 INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

Set clear “Investment Objectives”

• This should include time horizon
• Consider your liquidity needs
• Risk tolerance and other constraints
• Tax considerations etc

Determine your “Asset Allocation”

• The principle of diversification is crucial
• Balance your risk with return expectation
• Within each asset, also diversify

Minimize transaction cost

• Only buy and sell when necessary
• Ensure best execution
• Mutual Funds/ETFs minimize cost

Be Disciplined

• Focus on your objective
• Ignore short term noises
• Rebalance portfolios
• Restructure when necessary
• Do not be part of the herd
• Reset objectives if need be

22 INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

The Four Cardinal Principles of Investing Understanding “YOURSELF” as an investor - Investing

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 23

Peculiarities of Financial Products - Asset Classes

– Diversification from purely financial instruments – A good hedge against inflation – Components of both long term capital appreciation and current return in form of rental income – Moderate risk investment – Steady income from coupon payments – Income also earned from capital appreciation – Traded OTC – Low risk investments

• Money Market

– On a steady recovery path in 2012 – Historically, has outperformed all other investment vehicles in the long run – Good hedge against inflation – Moderate risk – Reliable source of income – Flexible choice amongst quality, maturity dates, returns – Liquidity – Low risk investments

• Bonds
• Equities
• Real Estate
• Private Equity

– Additional diversification opportunity to portfolio – Commodities offer best hedge against inflation – Private equity provide market-independent (absolute) returns on investment – Lock-in periods (investment horizon) for private equity could be high – High risk investmenrts

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

Let’s think about the risk of financial products

What are the risk factors that may reduce return or cause loss of value? Interest rate Exchange rate Economic growth Fiscal policies Credit risk Corporate governance Which product does these risk factors affect?

0.0% 100.0%

Potential Return R i s k

FGN Bonds

Private Equity

Real Estate Equity

Cash (TBs, BAs,CPs,etc)

State & Corporate Bonds

24

Peculiarities of Financial Products - Risk

Cash is king; when do you need back the cash?

When you need back the cash determines the tenor of the product The earlier you need cash, the lower the return Consider how easy it is to transform a product back into cash Cash is king

0.0% 100.0%

Potential Return L i q u i d i t y

FGN Bonds Corporate Bonds Cash (TBs, BAs, CPs, etc) State Government Bonds Real Estate/ Private Equity Quoted Equities

25 INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

Peculiarities of Financial Products - Liquidity

6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 0.0 10.0 20.0 30.0 40.0 1995 1997 1999 2001 2003 2005 2007 2009 2011 Comparing Returns between equities and bond over a 20-year period: Equities rallied 17% CAGR Vs. Fixed Income Yield of 13.0% over same period NSE Return trajectory Smoothed Return on Equity Smoothed Return on Bonds

Return comparison: Equity Vs. Bonds

Does equities truly compensate investors for the risk

• f volatility

Is the long term benefit of equities true in reality? How long can the long term be?

26 INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

Peculiarities of Financial Products - Return Comparison

The Risk and Return Pay-off; More Risk , More Return

Source: UBA Capital Research, Vanguard Group

27 INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

Peculiarities of Financial Products – Return vs Risk

The Investment Process

The Investment Process

The Client Risk Tolerance/ Aversion Tax Status Investment Horizon The Portfolio Manager’s Job Asset Allocation Risk and Return

• Measuring risk
• Effects of

diversification Security Selection

• Which stocks? Which bonds? Which real assets?

Valuation based on

• Cash flows
• Comparables
• Technicals

Private Information Execution

• How often do you trade?
• How large are your trades?
• Do you use derivatives to manage or enhance risk?

Asset Classes: Stocks Bonds Real Assets Countries: Domestic Non-Domestic Trading Costs

• Commissions
• Bid Ask Spread
• Price Impact

Trading Speed Market Efficiency

• Can you beat

the market? Views on markets Perform ance Evaluation

• 1. How

much risk did the portfolio manager take?

• 2. What return did the portfolio manager make?
• 3. Did the portfolio manager underperform or outperform?

Market Timing Stock Selection Utility Functions Tax Code Views on

• inflation
• rates
• grow

th Trading Systems

• How does trading

affect prices? Risk Models

• The CAPM
• The APM

28 INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 29

Why you need an “Investment Advisor”?

• Expertise and in-depth knowledge of the financial market
• To determine optimal mix of investment to achieve set goals
• Access to a broad range of investment opportunities/products
• Timely and effective reaction to changes in the market
• Close monitor of investment portfolio
• Tracking of all returns, including dividends and bonuses

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 30

UBA Capital Group – The One-Stop Shop for your Financial Needs

• UBA Capital Group, a major financial and investment services provider listed on the main board of the Nigerian

Stock Exchange. It was spun-off from UBA Plc in 2012 following the directive of the Central Bank of Nigeria requiring all commercial banks to divest from non-core banking activities.

• The Group's business is conducted primarily in Nigeria with a Pan-African footprint and aspirations to expand to
• ther major business capitals globally by leveraging on its broad reach and extensive market access to provide

both domestic and cross-border services.

• As at 01 December 2013, the Group had 4 billion shares in issue, a market capitalisation of US$39.6 million, and

total assets of over US$407 million.

• UBA Capital Plc is a leading financial and investment services institution and is made up of businesses that are

leading players in their respective business segments.

• UBA Capital Plc is well positioned to play a strategic role in helping its clients achieve their strategic objectives

through its robust suite of financial and investment service offerings… …UBA Capital Plc is poised to shape Africa’s financial future

UBA Capital Plc UBA Asset Management UBA Capital- Investment Banking UBA MetLife UBA Trustees UBA Nominee UBA Securities

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 31

UBA Capital Plc – Products and Services

UBA Capital Plc Service Offerings Investment Banking Asset Management Securities Trusteeship Debt Capital Markets Equity Capital Markets Mergers and Acquisition Project Finance Portfolio Management Mutual Funds Securities Dealing

(Fixed Income & Equity)

Equity Portfolio Management Receiving Agent to New Issues Corporate Trusts Bond Trusteeship Private Trusts Custodial Services Research Wealth Management Structured Finance Real Estate Advisory Stock Broker to Primary Issues Designated Adviser to SMEs Collective Investment Trusts Though UBA Capital operates out of Lagos, Abuja and Port-Harcourt in Nigeria, we have unlimited access to our customers due to our ability to leverage on broad reach and borderless access to key financial centres. Supplemental Market Making

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 32

UBA Capital Plc – Asset Management Products and Services

Fixed Income Investment Portfolio Management Investment Mutual Fund Investment Staff Investment Scheme Funds invested in

• Fixed Income
• Equities
• Fixed Income
• Equities
• Fixed Income
• Fixed Income

Principal Guaranteed Yes No Depends on plan chosen Yes Returns Guaranteed Yes No Depends on plan chosen Yes Expected Return Medium High Depends on plan chosen Medium Minimum Investment Amount

• N100,000
• N20,000,000
• N50,000
• N20,000

Minimum Investment Period 1 month 12 months 1 month 3 months Risk Low Medium Medium Low

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 33

UBA Capital Plc – Private Trusts Products and Services

Products Services Will & Executorships Where a Trust is built into the Will and appointment is so made in the Will and we can also act as Executor and / or Trustee of your Will. In this respect, we undertake : Bury the deceased in the manner suitable to the Estate, determine the validity of the Will etc. Private Education Trust It is essentially a Trust set aside to secure the education of Beneficiaries Private Investment Trust it is a Trust for long term saving and investment under Trust towards pre –defined purposes such as future business, family holiday, real estate etc. Family Trusts & Family Office it is a Trust to manage family estate as a single entity , structuring family offices. Nominee Services We hold shares for Private Clients in Nominee name and follow up with the collection of dividends and bonuses

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 34

UBA Capital Plc – Securities Trading Products and Services

UBAS High Prime UBAS Prime UBAS Thrive II UBAS Thrive (ONLINE) Target Investor High Net- worth Individual Middle- class Income Earner Retail Retail Minimum Investment Amount

• Silver - N 50 m
• Gold - N 100m
• Platinum – N

150m

• r the

equivalent in Stock value N5 million or the equivalent in Stock value N50,000.00 or equivalent in Stock value Zero account

• pening

balance Commission Negotiable 1.35% 1.35% 1.35% Additional Service Special account set- up with CSCS A dedicated account officer A dedicated customer service desk Execution only

We adopt an integrated approach that draws on the experience and competence of the firm, to deliver results above and beyond expectations and create value for our clients

35 INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING

UBA Securities Limited - Our Value Proposition

• Experienced
• Skilled
• Passionate
• Professional
• Access to Networks
• Indebt, World Class

Research

• Market Reports and

Updates

• Corporate Access
• Access to Dedicated

Research Analysts

• Block Trades and Liquidity
• Fast and Efficient

Execution

• Swift and Accurate

Feedback

• Competitive Pricing
• Listed on the

Nigerian Stock Exchange

• Effective Risk

Management and Group governance structures

• Transparency
• Accountability

.

QUALITY SERVICE

PEOPLE & TECHNOLOGY

RESEARCH

• Fast and efficient

execution

• Swift and accurate

feedback

• Competitive pricing
• Block trades and

liquidity

• Independent

research

• Prompt market

information and guidance

• Corporate Access
• Dedicated analysts
• Skilled and

Experienced Professionals

• Best-in-Class

Technology

• On-line service

platform INTEGRITY & RELIABILITY

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 36

Introducing www.investnow.com.ng

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InvestNow.com.ng - Features

A self service, real time on-line platform, providing independent online access to Securities Trading, Asset Management, Trusteeship from anywhere in the world. FEATURES

• Online Account Opening with zero account balance
• Online/Real-time Account funding
• 24hr Online Client Portfolio Access / Account management
• Online / Real time customer support services
• Online access to transaction history and reports
• Online trading capabilities
• Access to real time market data
• Access to UBA Capital research
• Access to a product specialist

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 38

InvestNow.com.ng – Account and Portfolio Management

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 39

InvestNow.com.ng – Order Management

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 40

InvestNow.com.ng – Contract notes and transaction history

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 41

InvestNow.com.ng - Research

Abiola Rasaq Head, Research Office: +234 1 280 8496 Mob: +234 803 365 1808 Email: abiola.rasaq@ubacapitalgroup.com Ijeoma Michelle Daramola Head, Private Clients Office: +234 1 280 8341 Mob: +234 809 990 5252 Email: ijeoma.daramola@ubacapitalgroup.com

Our Contact

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 42

Motunrayo Ade-Famoti Head, Private Trust Office: +234 1 280 7853 Mob: +234 814 227 0960 Email: motunrayo.ade- famoti@ubacapitalgroup.com Ahmed Maibe Client Manager Office: +234 1 280 7540 Mob: +234 803 307 0440 Email: ahmed.maibe@ubacapitalgroup.com

INVESTMENT BANKING | ASSET MANAGEMENT | TRUSTEESHIP | SECURITIES TRADING 43

Feedback

Questions and Answers

45

Understanding the Capital Market Cycles & Trends

NSE Retail Investor Clinic March 2014 Oluwole Abegunde MD, Meristem Securities Limited

46

• What are Cycles?

Cycles are common phenomenon in all aspects of life. A cycle is an event, such as a price high or low, which repeats itself on a regular

• basis. It ranges from short to a very long term in e.g. the life cycle of a

planet, which takes billions of years. Cycles exist in the economy, nature and the financial markets. The basic business cycle encompasses an economic downturn, bottom, economic upturn and top. Cycles in nature include the four seasons and solar activity (11 years). Cycles are also part of technical analysis of the financial markets. Cycle theory asserts that cyclical forces, both long and short, drive price movements in the financial markets Interestingly, no matter what market you are referring to, all have similar characteristics and go through the same phases. All markets are

• cyclical. They go up, peak, go down and then bottom. When one cycle is

finished, the next begins. Understanding The Concept of “Cycles”

47

• A market cycle shows price movements over time from a period of rising

prices and brilliant performance to a period of declining prices and poor performances and back again to rising prices. Stock market cycles are the long-term price patterns of the stock market.

• In a market cycle, we usually have periods of bull and bear markets.

Bull Market Bear Market

Market Cycle- Definition

10000 20000 30000 40000 50000 60000 70000

Jan/06 Jan/07 Jan/08 Jan/09 Jan/10

(

Prices trend upward driven by a host of factors e.g. fundamentals, positive sentiments, etc Prices trend downward driven by a host

• f factors e.g.

fundamentals, negative sentiments, etc

48

Market Cycle- Signals

10000 20000 30000 40000 50000 60000 70000

• 10000

10000 20000 30000 40000 50000 60000 70000 80000

Feb/08 Apr/08 Jun/08 Aug/08 Oct/08 Dec/08 Feb/09 Apr/09 Jun/09 Aug/09 Oct/09 Dec/09

Bull Market

• Securities highly undervalued
• Companies post impressive numbers
• Rising trend of volume of shares traded
• Investors have very high returns expectation/

speculative activities dominate

• A lot of primary debt and equity issues

Bear Market

• Securities are highly overpriced
• Investors expectations are way above

companies performances

• A lot of panic sales occur
• Volume traded gradually slows as investors

exit positions

• Primary market activity minimal

Source: Bloomberg

49

• Most investors and traders either fail to recognize that markets are cyclical
• r forget to expect the end of the current market phase. Similarly, even

when you accept the existence of cycles, it is nearly impossible to pick the top or bottom of one.

• But an understanding of stock market cycles is essential if you want to

maximize investment or trading returns. Discerning investors can find good stocks in just about any market; however it is easier in some situations than others.

• In a full-blown bear market, when very few stocks are rising is a tough

market for investors, yet, this presents some great opportunities when recovery begins.

• The most significant problem is identifying which phase is presently in

control at any particular moment. The four phases are accumulation, markup, distribution, and markdown. Relevance of Cycles to Profitable Stock Investing

50

• Market cycle is generally divided into 4 main phases:
• 1. Accumulation phase
• 2. Mark-up phase
• 3. Distribution phase
• 4. Mark-down phase

Market Cycle- Phases

Source: Investopedia.com

51

Accumulation Mark-Up Mark-Down Distribution

Market Cycle- Phases & Indicators

• Occurs after the market has

bottomed

• Market sentiment is bearish
• innovators and early adopters take

the lead after figuring the market has bottomed

• Valuations are very attractive
• Sentiments begin to become
• positive
• Market is stable and begins to move

higher

• Early majority joins the bandwagon
• As the phase progresses, more

investors join the bandwagon fearing they will be left out

• Towards the end of phase, late

majority comes in & greed relegates reason to the backseat

• This stage is most painful for those

still holding positions

• Many hold onto stocks because

prices have fallen below their entry price

• As the phase progresses and prices

plunge further, they give up their holdings to minimize their loses.

• Early innovators start to re-enter at

this point

• Sentiments become mixed
• Gradually sellers begin to dominate
• Investors become gripped with fear,

interspersed with hope and even greed

• Transition can be hastened if

accelerated by a strongly negative geopolitical or economic event

52

Market Cycle- Timing

• A cycle can last from a few weeks to a few

years depending on the market in question and the time horizon being looked at.

• Examples of identified market cycles

include the four-year presidential cycle on the American stock, real estate, bonds and commodities markets; annual seasonality, December/January effect etc

• Some times a cycle is completed faster

than at other times depending on many factors.

• What can be identified is what phase of

the market cycle the market is at any point using some Technical indicators such as the RSI.

20 40 60 80 100 120 14-Day RSI 90 per. Mov. Avg. (14-Day RSI) 10000 20000 30000 40000 50000 60000 70000 NSE Index 180 per. Mov. Avg. (NSE Index)

Source: Bloomberg

53

Market Cycle- So what?

• Even though not always obvious, market cycles exist in all markets
• Investors who understand the different phases of the market cycle profit

the most from markets

• They are also less likely to get fooled into buying at the worst possible

time.

Source: Macrotrends

• Investing based on fundamentals prevents one from adverse impacts of

speculative buying and selling of stocks.

54

What is Trend?

• This refers to a general direction of a market or of the price of an asset

and it varies in length from short, to intermediate, to long term.

• If you can identify a trend, it can be highly profitable, because you will be

able to trade with the trend

• A trend can also apply to interest rates, yields, equities and any other

market which is characterized by a long-term movement in price or volume Identifying Trends in Stock Investing

55

• Identifying when a change in market trend is occurring is one of the most

important skills to learn. However, there are several methods that can be used to identify a possible change in trend e.g. the emergence of a new pivot point.

• While identifying a pivot must always be done in hindsight, one can

examine clues on a chart to determine whether the probability of forming a new pivot is high. One technique is to watch for a partial retrace after a trading range has been established.

• When a stock refuses to honor an established range, it usually reverses to

break the trading range in the opposite direction, thus establishing a new pivot point. By picking a bottom, a trader can benefit by getting in early on a new trend. Identifying Trends in Stock Investing

56

• There are three (3) basic trends for stocks: uptrend (moving

higher), downtrend (moving lower) and consolidation (moving sideways). A stock in an uptrend is defined as making higher pivot highs, and higher pivot lows. downtrend uptrend Identifying a Partial Retrace

source : Investopedia.com

57

• A stock moving in a downtrend is defined as making lower pivot highs and

lower pivot lows.

• A stock moving sideways is defined as moving in a trading range making

pivot highs and lows approximately along the same horizontal area on a chart.

• Pivot points can be a little higher or lower, but generally speaking, the

stock is trending sideways. It is important to note that a consolidation base can also slope upwards or downwards Identifying a Partial Retrace

source : Investopedia.com

58

• While a partial retrace can be defined as anytime a stock retraces only a

portion of its prior move, this discussion will concentrate on stocks getting ready to move out of a consolidation base.

• Often, when a stock is consolidating, it is moving in a trading range, as

supply and demand are in equilibrium.

• As a stock rises to the top of the range, sellers step in thinking the stock is

getting expensive. As it drifts to the bottom of the trading range, buyers step in thinking the stock is becoming a bargain.

• This type of trend is necessary in order to weed out participants who are

not committed to the position.

• The trading range will stay in place until

either supply or demand triumphs. Typically, the trend prior to the consolidation is continued; however, there is always the possibility of a reversal Identifying a Partial Retrace

source : Investopeia.com

59

1992: Year of establishment 2003: Year of restructuring 2004: Meristem Registrar s was establishe d 2007: 7th Position

• n the

league table 2008: The setting up of Meristem Wealth Management Limited 2009: 2nd position

• n the

league table controlling 12% of market share 2012: Meristem Trustees Limited was established

2013 till date: amongst top- 10 list of the NSE broker-dealer performance by activity level

Meristem Securities Limited Meristem Stockbrokers Meristem Registrars Limited Meristem Wealth Management Ltd Meristem Trustees Limited

Our milestone

Address: 124, Norman Williams Street Off Awolowo Road S/West Ikoyi, Lagos Phone: 234 1 4488260, 234 1 2717350-5 Email: info@meristemng.com

Meristem Milestones

60

Abayomi Obabolujo Stockswatch Group March 19, 2014

200Stars Investment Limited

THE ROLES OF SHAREHOLDERS' ASSOCIATION IN THE CAPITAL MARKET

SHAREHOLDERS’ ASSOCIATION

• Definition
• Relevance as a Group
• Roles In The Capital Market

200Stars Investment Limited

INTRODUCTION

SHAREHOLDING - REDEFINITION

• Share/holder - an individual who buys shares and hardly

sells.

• Note: buying to resell is trading and not shareholding.
• A fellow who is always in the market irrespective of

sessions - up and down; bear, bull or sideway.

• An investor - in/vest- in/power
• Opportune individuals that the market exists to enrich.

200Stars Investment Limited

RELEVANCE AS A GROUP

• To create numbers, make the voices add up
• For united, progressive partnership
• For strength
• To enhance minority interest/holders’ protection
• Participation in Audit Committee membership
• Enhanced vote to determine Board composition
• Advisory roles
• Regulators - Suggestions, Objective criticisms and support.

200Stars Investment Limited

RELEVANCE AS A GROUP

• Govt- capital market committee of the National Assembly
• Quoted companies- strategy, opportunities.
• Pressure group
• Mobile, proactive and forceful
• Firm on Company Board and Management to enforcing

corporate governance

• At Annual General Meeting on Board composition et all

200Stars Investment Limited

ROLES IN THE CAPITAL MARKET

• Market’s marketer-enhanced local participation- investors

and companies

• Understanding of market developments and effective

communication/education among members

• Public enlightenment- general investment education among

members and the populace at large

• Understanding of market trends and effective

communication to members.

200Stars Investment Limited

ROLES IN THE CAPITAL MARKET

• Ensure transparency and accountability by quoted

companies

• Support smooth and uninterrupted running of the market
• High level optimism and onward transmission of same to

members and the public

• Company information dissemination and joint action
• Understanding of market rules, politics and policies and

effective communications to members and the populace

• Market stabilizer

200Stars Investment Limited

CONCLUSION

• The market exists as opportunity to make money works

for shareholders in varied categories, it therefore behoves on all shareholders and association to ensure partnership with relevant authorities in bringing about vibrant market with higher local participation. Thank you.

200Stars Investment Limited