Nigerian parliament passes bill to list the NSE as a public entity

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After several years of prepping the Nigerian Stock Exchange, NSE for a public listing, there seems to be a final closure to the landmark decision.

Nigeria’s upper legislative chamber, The Senate has just passed a bill that will see Africa’s second-largest stock market listed as a publicly traded entity.

This is a sharp contrast to the Johannesburg Stock Exchange, the JSE, that has been listed since 2006. With over 200 listed companies, the NSE is also less sophisticated when compared to the JSE.

However, there are still possible hurdles ahead of the listing project. The bill will still require presidential assent before being passed into law. The exchange will then make preparations for an initial public offering, IPO which in itself will take few months.

Give and take, analyst expected an actual listing to be completed towards the third quarter of this year.

Comparatively, unlike the JSE, the NSE has had a history of positive performance for investors. While Nigeria’s economy took a big hit between 2016 and 2017, the NSE managed to become the third best-performing market in the world despite Naira (NGN) devaluation and depreciation against the greenback and a thorny recession.

The market made a 42% year on year gain last year with about 16% gain in January already. However, the NSE is still very volatile as a result of Nigeria’s dependence on oil exports as a major source of revenue. A fall in global crude price will see foreign portfolio investors taking a sizeable part of their funds out of the market.

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