NSE Council, Others To Decide On Demutualisation Take Off
The Nigerian Stock Exchange, NSE has disclosed that the much awaited demutualisation Bill has been accented to and signed into law by the President Muhammadu Buhari as the Council and all other stakeholders now have to decide on the take off.
The Exchange also stated that it will continue to protect investors in the market but admitted that it cannot stop the Central Bank of Nigeria, CBN from carry out regulatory actions with regards to winding up of banks or taking over banks that are listed on the NSE. The Chief Executive Officer, Oscar Onyema stated this, while presenting 2018 market recap and 2019 outlook to the capital market community in Lagos.
A demutualised NSE will allow the stock exchange become a company limited by shares; having share capital or shareholders, a board of directors, management that is separate and independent from the board and subject to rules and regulations of company operations in Nigeria.
Onyema said a total of 5.42 million was paid to 62 claimants in 2018 as part of its investors ‘protection initiative.
The amount, according to Onyema, brought the total amount paid out to beneficiaries of the Investors’ Protection Fund, IPF, to N65.58 million in three years.
Onyema said: “Demutualisation Bill has been accented to and signed into law by the president, as the Exchange along with other stakeholders are working on the final stages of the process.”
While presenting 2018 market recap and 2019 outlook, Onyema explained political risks, oil price volatility and rising global yields resulted in the bearish run witnessed in the equities market in 2018 and consequent increase in the fixed income segment of the market by 22.34 percent. “While listing activity remained relatively low during the year, (one listing and four delistings) equity turnover remained relatively stable, marginally declining by 5.45 percent to N1.20 trillion.
Turnover velocity inched up 0.91 percentage points to 10.25 percent, and likewise, the size of volumes traded in the period increased by 0.96 percent to 101.43billion with the financial services sector being responsible for the highest traded volume and value.
Also, fixed income market capitalization increased by 11.75 percent to N10.17 trillion from N9.10 trillion in 2017. With regards to NSE derivatives initiative, My Onyema said that “our technology infrastructure has been enhanced to support the trading launch.
The rulebook has been created and is currently going through the approval process alongside on-boarding of dealing members.
Onyema stated that in order to enhance its listing prospects, it would strengthen engagement with government on privatization and listing of state owned enterprises, while taking advantage of opportunities within the space during the year to attract new listings.
“We also intend to maintain our collaborative efforts with public and private sector stakeholders to advocate for market friendly policies, and cater to infrastructure financing needs as well as other capital requirements necessary for sustainable economic growth. The Exchange intends to work with the private sector as well, to catalyse the listing of more companies,” he said.
