Stockbrokers hail NSE on Demutualization Approval

Read Time:4 Minute, 30 Second
Stockbrokers hail NSE on Demutualization Approval

History was made yesterday in the Nigerian Capital Market as the-long awaited demutualization of The Nigerian Stock Exchange was finally approved by the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC), thus transforming the non-profit Exchange to a public company.

The announcement  which threw stockbrokers into festive mood has earlier led to the creation of The Nigerian Exchange Group Plc (NGX Group) with three operating subsidiaries: The  Nigerian Exchange Limited (NGX Limited), NGX Regulation Limited (NGX REGCO) and NGX Real Estate Limited (NGX RELCO).

With the announcement of demutualization, The Exchange’s market capitalisation rose by N128 billion or 0.63 per cent to close at N20.369 trillion against N20.241 trillion recorded on Tuesday. The All-Share Index also appreciated by 244.40 basis points or 0.63 per cent to close at 38,931.25 basis points from 38,686.85 basis points achieved on Tuesday.

“ It is a manifestation of awaiting development for the Nigerian economy. The development is one of my happiest moments as the Chairman of ASHON having along with other critical stakeholders delivered on the mandate to demutualize The NSE. Demutualization will enhance effective transformation of not only The NSE but entire Securities ecosystem in particular”, says the Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Onyenwechukwu Ezeagu.

President, Chattered Institute of Stockbrokers (CIS), Olatunde Amolegbe said The NSE had opened a new vista that would improve the operating standards that key capital market stakeholders and investing public have been longing for the  approval because of its inherent benefits to them and Nigerian economy at large.

“The long-awaited approval will herald a new vista in the growth trajectory of The Nigerian Stock Exchange. This is a process that has already enjoyed  the support of  market stakeholders because of the immense benefits that we expect that it will bring to investors and the Nigerian Economy at large” he said.

Demutualizationof The Exchange is expected to create new strategic opportunities.

NSE Council President, Otunba Abimbola Ogunbanjo said successful demutualisation was one of his fundamental objectives when he assumed the Presidency of The Exchange.

He stressed that SEC’s decision to approve The NSE’s demutualisation plans brought Chairman of ASHON the aspiration to a successful conclusion in a process that included the passage of the Demutualisation Act through the National Assembly.

He applauded the milestone, adding that it has been achieved as The NSE celebrates its 60th anniversary of the commencement of trading at The Exchange while looking forward to the future public listing of its shares on NGX Limited.

“On behalf of the NSE, I would like to warmly thank all those that have worked assiduously to achieve this watershed event on our journey to make the NSE a multifaceted exchange that extends across various markets and geographical regions”, Ogunbanjo said.

By the approvals the NSE can now activate its Transition Plan to a new operational structure and holding company.

The extensive Transition Plan, taking the Group and its subsidiaries through to full Operational Launch, covers legal and practical changes to enable the functioning of the new corporate structure, with no loss of service and a seamless transition for market participants.

The Transition Plan will also see the inauguration of Boards for each of the new entities, staff reallocation to their respective functions within the operating subsidiaries, operationalisation of business plans and budgets, technology systems transfer, and the requisite arm’s length agreements between the entities.

“Upon Operational Launch, the Group’s new brands, including a new website, will be unveiled and the Group will be in position to execute on its strategic vision. Stakeholders, including our new valued shareholders will benefit from The Group’s enhanced Corporate Governance framework, access to capital to fund strategic developments and a more globally competitive Exchange”, according to a statement from The Exchange.

The approvals also enabled the shares of NGX Group Plc, which have been registered with the SEC, to be allotted to the membership pursuant to the Court approved Scheme of Arrangement.

“Ahead of its listing on NGX Limited, the shares of NGX Group Plc will be available for bilateral trades to be executed in line with extant rules and regulations of the Nigerian capital market. Otunba Ogunbanjo will serve as the inaugural Chairman of NGX Group Plc’s Board of Directors”, The NSE statements reads.

The new Group CEO of NGX Group Plc, Oscar Onyema said Nigerian capital markets should play a role commensurate with Nigeria’s status as Africa’s largest economy.

He said The NSE had a vision that the new group would become the premier exchange hub for Nigerian businesses and for the African economy.

“We are implementing a series of measures towards this goal, demutualisation being a critical milestone. The completion of demutualisation is a truly significant moment, and we welcome the new possibilities that have opened up for us today”, Onyema said.

Demutualisation of the NSE is pivotal in that it creates new strategic opportunities that will enable the Group realise its vision of becoming Africa’s leading capital market infrastructure provider.

The creationof a holding company and a new capital structure will also enable NGX Group Plc to form new dynamic relationships, drive strategic partnerships and gain capital raising flexibility. It will be recalled that NSE members approved at its last AGM, the listing by introduction of NGX Group Plc on NGX Limited.

0 0

Leave a Reply

Your email address will not be published. Required fields are marked *