Nigerian Stock Exchange prepares to go public


The Nigerian Stock Exchange, NSE will be listing and taking itself public. The NSE is Nigeria’s foremost capital market for all investment securities.

According to Reuters News Agency, the NSE will be courting the approval of its members by the 30th of March to seek approval from its members to become a publicly traded entity.

Nigeria’s bourse, the second-biggest in sub-Saharan Africa after Johannesburg and one of the main entry points to invest in Africa, is currently owned by stockbrokers and some institutional investors.

As at today the NSE has a about 200 listed companies, all included in its benchmark share index.

The equities market in Africa’s largest economy, was until 2013 one of the world’s best performing frontier markets but low liquidity levels and currency restrictions have now deterred foreign investors.

This year, shares in the oil producing-nation have lost around 7 percent to add to the 6.2 percent loss last year reflecting an economic crisis there caused by low oil prices.

But on Thursday stocks rose to their highest level in a week in naira terms after the government said it was determined to tackle the crisis this year. Stock also surged to a 16-year high in dollar terms.

As a first step, Nigeria’s stock exchange will change its ownership structure from a mutual company of brokers to add new shareholders in a process known as “demutualisation”.

It hopes this will help it improve transparency, product development and deepen the market, leading to more inflows from foreign investors, analysts say.

In its journey to going public, the NSE said it will be advised South African bank FirstRand and local investment firm Chapel Hill Denham to guide it through the process of becoming a listed company. The stock exchange said it will ratify their appointment at the meeting this month.

The bourse has said it will fast-track the listing of exchange traded derivatives this year to help investors manage risk and has created a counterparty clearing house to support the process.

The NSE will be second to the Johannesburg Stock Exchange (JSE), the most developed stock market in Africa which became a public company since 2006.

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