Nigerian Stock Exchange set to approve listing of own stocks

There are clear indications among members of Nigerian Stock Exchange (NSE) that at today’s annual general meeting, there will be approval for the long awaited demutualisation, which allows the shares of the Exchange to be quoted on the trading floor.

Demutualisation transforms a stock exchange from a self-regulatory organisation (which the NSE is today), with no shareholders, to a public company that is shareowner-based and profit-seeking.
“I believe that there is a better chance that the prayers will be answered tomorrow (today) after the spirit of engagement with members of the Exchange,” a market source told BusinessDay.
Today’s approval for demutualisation of the Nigerian Stock Exchange will herald the conversion of the Exchange from a member-owned mutual organisation to shareholder-owned public limited liability company that aligns with global best practices.
Barely five months ago, the Nigerian Stock Exchange appointed the consortium of Rand Merchant Bank (RMB) and Chapel Hill Denham (CHD) as financial advisers on the proposed demutualisation of the Exchange.
Some publicly listed exchanges across the globe include: Bursa Malaysia, Deutsche Börse, Hong Kong Exchanges, Johannesburg Stock Exchange, London Stock Exchange Group, NASDAQ OMX Group, NYSE Euro next, Athens Stock Exchange, Australian Securities Exchange, and BM&F BOVESPA S.A.
“It is very likely that the members will approve the demutualisation of the Exchange. It is long muted here in Nigeria but misunderstood, members have come to realise that demutualisation is a global trend, and in line with what is obtainable at other global exchanges,” another source added.
Our check shows other demutualised Exchange such as BME Spanish Exchanges, Philippines Stock Exchange, and Singapore Stock Exchange.
The importance of today’s annual general meeting of the Exchange, the first time it is secluded to only members, further underscores our source’s view.
Oscar N. Onyema, Chief Executive Officer of the NSE said their appointment affirms the Exchange’s commitment to achieving the demutualisation of the NSE in a methodical and transparent fashion.
“We have implemented a number of initiatives to strengthen and improve governance at the Exchange. This demutualisation process will contribute to the sustenance and enhancement of our governance. We are truly encouraged by the support from our stakeholders, particularly our regulator, the Securities and Exchange Commission for creating the appropriate framework to accelerate the process that would engender a more open, transparent and credible Exchange”, Onyema had said.
“We believe a demutualisation will further strengthen the NSE’s position as a leading exchange in Africa. We intend to leverage our deep advisory and structuring expertise and in-depth understanding of the Global Market Structure and Broker Dealer sector to support the process,” Michael Larbie, CEO of RMB Nigeria and Regional Head for West Africa said, following their appointment as Financial Advisers for Demutualisation.
Onyema reiterated the commitment of the Exchange to ensuring that the interests of all members are protected in the demutualisation exercise.

 

Iheanyi Nwachukwu