David Adonri, the managing director of High Cap Securities Limited and a renowned stockbroker of the Nigerian Stock Exchange Thursday said the clarification by the Central Bank of Nigeria on sanctions meted out to the banks for their involvement in the repatriation of funds belonging to telecoms giant, MTN is a welcome development.
The CBN had late Wednesday issued a statement informing the investing public of an equitable resolution amongst parties involved and assured investors against any form of annihilation.
“The recent sanctions on the banks arose due to irregularities with respect to repatriations made on behalf of MTN Nigeria Limited and were not in any way designed to restrict access to investor returns,” the CBN explained.
It also noted that “In response to the recent regulatory actions, the banks and MTN are engaging the CBN and have provided additional information which is currently being reviewed with a view to arriving at an equitable resolution.”
Adonri who was reacting to this development in a monitored televised interview said “the banks involved in the MTN funds repatriation namely, Citi Bank, Standard Chartered and especially Stanbic IBTC and Diamond Bank because of their being listed on the NSE, have since been viewed with suspicion by investors.
He however stated that the development has been handled with wisdom and I believe it’s a welcome market development.
Speaking on the possibility of a northward movement in the prices of the affected bank’s stocks, Adonri said “prices in the market depends on information. The current development is likely to reflect in the demand for these stocks and if the demand are heightened the price will trend higher.”
Diamond Bank as at midday had its stock trading flat at N1.27 per share, Stanbic shares were also flat at N42 per share while MTN shares at the Johannesburg Stock Exchange were reported to have soared above 7 percent early Thursday.
The CBN in its press statement signed by Isaac Okoroafor, the director of corporate communications, acknowledged the public interest over sanctions recently imposed on the four deposit money banks (DMBs), and added that the apex bank will continue to welcome foreign investments and investors.
The CBN also highlighted some of its recent innovations and reforms of the foreign exchange regime such as the introduction of the NAFEX window, designed to simplify foreign exchange regulations.
“The delegation of the issuance of Certificates of Capital Importation (CCIs) to commercial and merchant banks some years ago was done to instill confidence in the investor community and encourage the flow of foreign direct and portfolio investments into the Nigerian economy,” the CBN further explained.
“We assure all investors that the integrity of the CCI regime remains sacrosanct and there shall be no retroactive application of foreign exchange rules and regulations.”
The CBN thus urged all legitimate investors to take advantage of the enormous investment opportunities in Nigeria.