By ADEBAYO OBAJEMU
Many shareholders are worried about a lot of issues relating to the stock market. One of the most troubling of these issues is what to do with dozens of share certificates and dividend warrants in our care, either ours or inherited from our parents that have passed on?
A lot of people know little about the working of the stock market.
It is even possible you had bought those shares and armed with the certificates before you travelled outside Nigeria and now wondering what has become of all the shares you bought during the stock market boom.
Your worry now may be how you can track them considering that some of them may have had a rebound following the great crash in the value of stocks? The good thing is that you can track those stocks you may have lost years ago.
What are share certificates?
In a layman language, share certificates are physical evidence of your ownership of shares in a private, public or quoted company.
It should be noted that for those companies quoted on the Exchange, shares are normally issued during Initial Public Offerings (IPO’s) or Public Offerings.
In the past, such offerings went along with share certificates which often arrived some months after the offers were closed.
How to make share certificate useful?
We should note that share certificates can be used in several ways. One, it can serve as a collateral for a loan if the underlying shares are worth a lot. It can also be monetized by selling part or all of the shares listed in the top right or left corner of the share certificate
How to monetize the share certificate?
This is not a difficult process. In order to monetize your share certificate, you will have to open a stock brokerage account if you do not already have one.
The second step after opening stock account is to hand over the certificates’ to your stockbroker and instruct them to convert the shares into tradable stocks, in a process called dematerialization.
Once the share certificates are dematerialized, they enter the database of the Central Securities Clearing System (CSCS) and you can now sell it.
What to do if the shares are not in your name?
We should admit that this happen from time to time. In this part of the world, people often buy shares in the name of their children or loved ones.
In such a case, if the person is a minor then the next step is to open an account for the person which you will manage on their behalf.
If the person in question is becoming an adult as in being above 18 then you may have to obtain their consent to manage the shares on their behalf.
In the scenario you bought the shares in a family name, then there will have to be a joint account opened or a trustee mandated to manage the shares.
If the company is moribund or assumes other identity
This often happens, meaning that such possibility is high. Some companies may no longer function in their previous forms because they have changed into other companies either through name changes, mergers, or a takeover.
If that is the case, then you need not lose your sleep as all you need to do is go online and do a search in order to locate the name of the registrars of the company.
If the company no longer exists because it has been liquidated, then you can also contact the registrar who will link you up to the liquidator in the event that they were able to recover some funds for shareholders.
How to find out if the shares have value?
It is trite platitude that quoted shares have a market value. To determine the value of quoted shares you can go to the website of the Nigerian Stock Exchange and download daily stock prices.
You can also find out that in the website of the CSCS. Once you are able to determine the price, multiply it by the number of shares on your share certificate and you can easily determine the value.
Locating lost shares
Many people lose their share certificates either through post or via undelivered mails. It may also be that it was stolen or just missing.
A lot of people also get bonus issue without being aware of this. Whatever the case may be, you can recover these lost shares by going to the registrar of the company.
You can approach your stock broker and hand him a mandate to check with the CSCS as the shares may have been lodged with them especially if it was an e-bonus or is already dematerialized.
Ascertaining status of shares since the crash?
Well, a lot of people or rather investors are worried about the status of their shares after the crash of 2008/2009.
We need not worry too much. The first thing you should do is try to locate your CSCS number which is given to everyone who trades in shares. You can then contact your stockbroker and ask that they give you your statement from inception till date.
If you do not remember who your stockbroker is then approach a new one with your CSCS number and ask that they locate your portfolio. You may have to register with them as well before this service is rendered.
What if I am living broad?
This is also a common phenomenon. A lot of Nigerians with shares are abroad and anxious about the status of their shares.
If you are living abroad and don’t have access to a stockbroker, just go to the website of the CSCS and click on their contact to get their details and give them a call, you can also click on their product and services portal and follow the prompts.
Once you register with them after paying some fees, you will be able to view all stocks bought in your name irrespective of the stock broker.