The Chief Executive Officer of the Nigerian Stock Exchange, Mr Oscar Onyema, has disclosed that efforts are being made towards ensuring that the public listing of the Nigerian bourse gets completed before the end of 2019.
Mr Onyema made this disclosure while granting interviews on the sidelines of the public listing of MTN Nigeria earlier this week.
According to him, “We are shooting for this year for the demutualisation to be completed.”
The Backstory: The NSE’s demutualisation process has been ongoing for some years now following its initiation by The Exchange.
In 2015, the Securities and Exchange Commission (SEC) issued the Exposure Draft Rules on the demutualisation of exchanges in Nigeria. That same year, the Nigerian Stock Exchange appointed financial advisers to advise it on a proposed demutualisation of the NSE.
Early last year, Nigeria’s lower legislative house, the House of Representatives, passed a bill amending the laws establishing the NSE. This followed an earlier signing of a similar bill by the Senate, all part of the processes leading to the demutualisation of the Nigerian bourse.
In June 2018, Oscar Onyema revealed that the demutualisation process has reached the final stage of implementation, following its first and second readings as well as a public hearing at the National Assembly. He also stated that they were waiting for the demutualisation bill to be signed into law.
In January this year, Mr Onyema once again gave an update on the process. According to him, the bill had finally been signed into law by the Presidency. All that was left was for the NSE Council and all other stakeholders to decide on a takeoff date.
Apparently, the takeoff date is what is currently delaying the completion of the process.
Why this matters: According to Mr Onyema, the eventual completion of the demutualisation process would give enable the Nigerian bourse to fully modernise its processes.
More so, the completion of the demutualisation would enable the NSE to “give a very clear signal to the market on how we intend to proceed with that liquidity”.
The optics: The Nigerian Stock Exchange is one of the biggest Exchanges in Sub-Saharan Africa; second only to the Johannesburg Stock Exchange in South Africa. Despite this, it has often faced criticisms due to its lack of “modernity”. It is, therefore, a good thing that its public listing would help it to fully modernise, even though the CEO didn’t clarify exactly how this would be the case.
“The decision hasn’t been made yet whether that capital raising will be an IPO or some other type of other forms of capital raising.” -Onyema