FMDQ OTC shareholders endorse N5b fresh capital plan for business development

FMDQ OTC Securities Exchange Plc on Friday endorsed the board and management’s plans to raise fresh of N5 billion to boost operational development.
The News Agency of Nigeria reports that the shareholders gave the approval at the company’s sixth Annual General Meeting in Lagos for the financial year ended December 31, 2017.
The shareholders also, at the meeting, approved the company’s name change from FMDQ OTC Securities Exchange to FMDQ Securities Exchange Plc.
Addressing the shareholders, Dr Joseph Nnanna, the company’s Chairman, said that the capital raising exercise would be by rights issue and public offering as the case may be.
Nnanna said that no stipulated date had been fixed for the capital raising programme.
He said that the fund raising was not urgent but would likely be done during the course of the year, noting that the company was just being proactive.
Nnanna said that the fund was to be raised in tranches and would be deployed towards subsidiaries and products development as well as other exigencies.
On the company’s financial performance, he said that the exchange admitted a total of 50 debt securities worth N236.87 billion during the period under review.
Nnanna also said that it attracted foreign currency-denominated securities listings worth 4.98 billion dollars in 2017.
He said that the Federal Republic of Nigeria made history by listing, for the first time on a Nigerian Exchange, its Eurobonds and the inaugural Diaspora Bond on the OTC Exchange.
He said that the exchange revenue during the period rose by 25.94 per cent to N2.57 billion against N2.04 billion in 2016, the highest recorded since inception in 2013.
“However due to investments made in strategic market development initiatives during the year, the operating expenses also grew by 39 per cent to N2.22 billion.
The chairman said that the operating expenses led to a decline of 20.58 percent in profit before tax, which stood at N349.76 million compared with N440.4 million recorded in 2016.
He said: “Turnover from trading activities on our platform also recorded the highest value since inception at N142.03 trillion, a 25 per cent increase when compared to the previous year.”
Nnanna said that increased trading activities were seen in the Treasury Bills and Foreign Exchange product lines.
Bola Onadele, the company’s Managing Director, said that the exchange recorded a total of 37 Commercial Papers, 10 bonds and three funds quoted and listed on its platform in 2017.
Onadele said that the company experienced an increase in the contribution of non-transaction fees to total revenue from 32.29 per cent in 2016 to 36 per cent in 2017.
He attributed the growth in revenue to the company’s diversification drive.
Onadele said that the diversification drive was a major factor that aided the sustained financial performance through the challenging market conditions of 2017.
He said that the company would continue to reinforce its role as Nigeria’s foremost debt capital, currency and derivatives OTC securities exchange.
Onadele said that the listing of the inaugural Diaspora Bond was a major feat for FMDQ and Nigeria.
He said: “This promotes, among others, visibility for the issues and financial inclusion, and demonstrated the government’s commitment to drive the growth and development.”