The Association of Securities Dealing Houses of Nigeria has expressed concern over the Central Bank of Nigeria’s recent circular indefinitely suspending dividend payments by banks.
Chairman of ASHON, Sam Onukwue, in a statement on Tuesday, said that the directive, issued on June 13, was said to ensure compliance with regulatory forbearance and Single Obligor Limit (SOL) requirements.
According to him, the timing of the directive is inopportune, given the ongoing efforts by banks to meet the increased minimum capital requirement which is regulatory induced.
He said “The announcement of this price-sensitive information has caused shock and dismay due to its potential impact on shareholders and the stock market. The indefinite suspension may erode investor confidence in the banking sector, potentially triggering a sell-off of bank shares on the Nigeria Exchange Limited (NGX), where the sector dominates daily transactions. ASHON suggests that the CBN could have managed this situation more discreetly to avoid speculation and market volatility.
“Unless an alternative solution is found, this directive may hinder banks’ capital-raising efforts, particularly those yet to commence their capital raise before the deadline.’’
(NAN)
