On the Nigerian Stock Exchange (NSE), 10 companies have pledged to lend investors a total of 20.8 million shares, as Guaranty Trust Bank (GTB) Plc providing the highest.
According to its securities lending and borrowing report for January 10, 2020, the NSE, which monitors the process, said GTBank pledged to lend a total of 8,439,000 units of its stocks to interested investors.
The stock market regulator said, in total, 20,784,021 equities are available for lending. From the figure, Presco is offering 4,075,000 units, MTN Nigeria 2,378,000, Okomu Oil 2,340,000, Dangote Cement 1,652,000, UBA 900,000, Dangote Sugar 700,000, Nigerian Breweries 200,000, Flour Mills 100,000, while Chemicals and Allied Products (CAP) is lending 21 units.
According to the NSE, in 2019, a total of 61,435 equities were lent by seven firms, with FBN Holdings providing the highest, 51,000 units. It further said Access Bank provided 10,000 units, Fidelity Bank, FCMB and Africa Prudential lent 100 units each, while Lafarge Africa provided 135 units.
Securities lending involves the transfer of shares to a borrower from the owner for a period of time and for a fee. At the expiration of the loan period, the stocks are returned to the lender and the collateral given to the borrower. This transaction is done through accredited securities lending agents.