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FREQUENTLY ASKED QUESTIONS ON ZENITH SECURITIES LTD

1. What exactly does ZSL do?  
ZSL assists individuals and institutions to create, accumulate, preserve and distribute wealth through its brokerage and advisory services.

2. How do I access my stockbroking account if not physically available in your office? ZSL would give you online access to your account where you can place mandates on the web, view daily portfolio valuation, access transactions executed on the account etc.

3. What is the minimum monetary requirement to open a stockbroking account with ZSL?
A minimum of N10 million

 4. What is Zenith Esteemed Margin Facility(Zema)
Zenith esteemed margin facility is a loan product that allows you to increase the size of your investment portfolio and potentially earns greater investment return. Individuals who are gainfully employed and earn a minimum annual gross income of N1.5million per annum can apply for these products. These individuals must provide verifiable proof of loan repayment capacity as stated in our application forms.

5. Who can apply for a Margin Trading Facility
Corporate institutions and gainfully employed individuals.

6. What is required to qualify for Margin Trading Facility?
Applicant must open a Stockbroking account with Zenith Securities Ltd and have assets of at least N10m or cash contribution of the N10m.

7. What is the maximum amount that I may request for?
The maximum that you may request for is 100% of the value of the shares you wish to
Acquire subject to a maximum of N200m

8. What is the minimum amount that I may request for?
The minimum amount is N10m

9. What interest rates apply to ZEMA?
The rates are as stated. However, concessions may apply at the discretion of management, on large ticket transactions and on a case by case basis.  

10. What about ZSL brokerage fees?
ZSL brokerage fees are competitive enough and affordable for all its clients.

11. What kind of services can ZSL offer its clients?
ZSL offers prompt and timely execution of trades provides informative investment advice (from its financial advisors/analysts) to its various clients, personalized stockbroking services.

12. Is ZSL accessible?
ZSL is accessible via e-mail, telephone or any of the Zenith Bank Plc Branches nationwide.

13. What about its research service?
ZSL offers and provides quality stock research reports and updates on the companies quoted on the floor of the Nigerian Stock Exchange to its numerous clients.

14. How do I know the stocks to buy?
ZSL skilled customer service staff backed by its research department would always advise you on which stocks to buy based on different stock pick parameters like the stocks’ fundamentals, technical trend etc.

15. How do I make payment?
You can either write a cheque in favour of Zenith Securities Ltd or deposit money into ZSL bank account to cater for the purchase.

16. How do I make purchase?
You can place the purchase order via ZSL mandate e-mail address, online etc

17. How do I know if my orders are executed?
Before the closing of business of the execution day, contract notes via e-mail would be sent to our clients on any executed trades and if could not be executed for any reasons, an e-mail notification would still be sent to clients on their mandates status.

18. How do I get market information from ZSL?
Prompt dissemination of market news via email and on ZSL website.

19. What can ZSL as a brokerage firm offer its clients?
ZSL offers quality and efficient customer services, personalized stockbroking services, personalized portfolio managers services, personalized excellent financial advisory services etc

FOR FURTHER ENQUIRIES/CLARIFICATIONS ON THE ABOVE SUBJECT, PLEASE CONTACT HAFFORD UDOCHUKWU, CHARLES UJOMU OR TOCHI OKORONKWO ON 2781201-5

 

 
Frequently Asked Questions on Bonds Trading
 
  1. What is a bond? - A bond is a contract between a lender and a borrower, whereby the borrower agrees to pay the lender interest and repay principal at stipulated periods. It’s similar to an IOU, issued by the Government or an institution as a way of raising funds for particular projects. Bonds have a minimum tenor of over a year.

  2. Who are the issuers of bonds?-Bonds can be issued by either a Government (Federal, State or Local government) or a Corporate Entity. These are the borrowers to the bond issues.

  3. Who are the investors in bonds? – Anyone can invest in a bond. They can be individuals or corporate bodies. They are the lenders to the issuer.(Bondholders)
  4. What is a coupon? - Coupon represents the interest payment that the investor in a bond receives as interest payment for investing in a bond. It’s normally paid semi-annually, but can be paid monthly, quarterly or annually.

  5. What types of bonds are there? - There are various types of bonds depending on the following:
    1. Issuers:
    2. Mode of Coupon Payment
    3. Redemption Features
    4. Sovereignty.

  6. Do I pay tax on my coupon payment? Coupon payment is Tax Free in Nigeria.

  7. What is a bond’s maturity date? - This is the date when the issuer of the bond will repay the investor the principal amount borrowed and the final interest payment.

  8. What is the term to maturity of a bond?- This is the number of years remaining for  an already issued bond to mature

  9. What is an indenture? – This is a document containing the terms and conditions binding both parties (Issuer and Investor) to a bond issue.
  10. Who is a trustee? – They are appointed to represent the interest of the bondholders, to ensure that the promises of the issuer in the indenture are fulfilled.

  11. What are affirmative covenants?-  These are activities that the issuer promises to do, e.g. pay coupon and principal timely.

  12. What are negative covenants?-  These are restrictions on the issuer’s activities, e.g. the inability to incur additional debt while bond has not been redeemed.

  13. What are option free bonds?- Option free bonds are bonds that do not have any special features in the indenture, allowing the issuer recall the bonds early or the investor to return the bonds before maturity

  14. What are embedded bonds? - These are bonds that have special features embedded in their indenture, which gives the issuer or investor the right to take certain actions against the other party.

  15. Is it possible to buy bonds in-between coupon date? – Bonds can be purchased between coupon periods, as long as the accrued interest is paid to the seller of the bonds. This accrued interest is known as the Dirty Price of the bonds

  16. Who gets the coupon for a bond sold in-between coupon dates? - The coupon goes to the holder of the bonds on the register closure date.

  17. What is the impact of a bond’s yield’s on bond prices? – bonds prices and yields have an inverse relationship. the higher the price the lower the yield and vice versa

  18. What are the factors that can affect the price of a bond? - The price of a bond is affected by the yield in the market. Yields are affected by interest rates, which in turn are affected by various economic factors like, inflation, government’s lending rate, exchange rate, government polices, political stability and other macro economic variables.

  19. What factors can affect the bond market?
    1. The credit status of the issuer
    2. The forces of demand & supply of such securities
    3. The inflation and interest rate movements
    4. Activities and performances of the equities market.

  20. What are the benefits of holding bonds in my portfolio? - Bonds are otherwise known as fixed income securities. It’s ensures that the investor has guaranteed returns on its investment for a definite period of time. It also assists investors and fund managers in diversifying their portfolio.

  21. How do I invest in the FGN Bonds?- At the primary auction where the bonds are freshly issued, you can bid through any of the 20 appointed primary dealers/market makers(PD/MMs).Zenith Bank is an appointed primary dealer.

  22. Upon purchase of the bond, how long can I wait before I can convert it to cash?- you can convert it to cash immediately by calling on any appointed primary dealer/market maker who are mandated to give two-way price(Bid & Offer) in all FGN Bonds

  23. Is the interest payment on Bond accrued on yearly basis or twice a year? - All FGN Bonds pay coupon (interest) semi-annually i.e. twice a year.

  24. How do I receive my interest payments and interest at maturity? - Interest and principal amounts will be credited to the holder’s bank account.
 

For further enquiries/clarifications on the above subject, please contact:

Tosin Osunkoya, Nnamdi Nwizu or Olawunmi Taiwo on 234-1-2783269, 2783481-2

 

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