Stakeholders and operators in the Nigerian capital market have commended the National Assembly for the passage of the bill on the demutualisation of the Nigerian Stock Exchange. They described the development as both timely and reasonable, according to a statement.
They urged President Muhammadu Buhari to speedily give assent to the bill in view of what they described as its ‘huge benefits to the nation’s economy’.
The statement said the bill sought the conversion of the NSE from a company limited by guarantee to a company limited by shares.
It added that the bill, which was titled ‘An Act to facilitate the development of Nigeria’s capital market by enabling the conversion and re-registration of the Nigerian Stock Exchange from a company limited by guarantee to a Public Company Limited by Shares and for related Matters, 2017’, (otherwise called ‘demutualisation bill’), was passed by the Senate on December 22, 2017, and by the House of Representatives on February 1, 2018.
The statement said following differences in the long title of the bill, a conference committee was subsequently constituted by both chambers, the report of which was approved on May 30 and 31, 2018 by the House and Senate, respectively.
The Chief Executive Officer, NSE, Oscar Onyema, while justifying the essence of demutualisation, said the bill, which was awaiting Presidential assent, would give the NSE the flexibility to swiftly respond to industry shifts and economic headwinds/tailwinds, and more real-time trading operations.
He said it would promote more effective competition on a global scale, better positioning for the listing of large multinationals and local corporate in Nigeria, as well as better positioning to innovate, embrace market changes and meet customers’ demands.
Onyema described the NSE’s conversion and re-registration into a public company limited by shares as essential to the development and strength of the capital market.
He said, “The conversion will enhance the formation of capital for the expansion of the Nigerian economy as the move is also in line with the 2015-2025 Capital Market Master Plan.
“The proposed demutualisation will promote efficiency in the creation and harnessing of capital, as well as create liquidity in the market, adopt and strengthen corporate governance best practices.
“It is anticipated that the demutualisation of the NSE will reinforce the continuous growth and development of a dynamic, fair, transparent and efficient capital market and thus significantly contribute to Nigeria’s economic development.”
The Managing Director, Centrepoint Investments Limited, Emmanuel Awure, while praising the courage and foresight of federal lawmakers, said when the bill would become functional, it would result in an increased value of the NSE.
He said it would enable the Exchange to compete favourably in the global market, open the doors for significant investment into Nigeria and ultimately enhance the nation’s capital market.
Awure said, “The demutualisation of the Exchange will bring the Nigerian capital market at par with other international jurisdictions, result in enhanced governance, transparency and visibility, while attracting strategic partners, investors and good quality issuers.”
The Personal Assistant to the Chief Executive Officer, Capital Assets Limited, Ms Elizabeth Okolo, congratulated both the council and members of the NSE on the passage and urged President Buhari to expeditiously consider and sign the bill into law.
Okolo stressed that the demutualisation, when implemented, would give the Exchange the ability to take a number of strengthening actions that would promote transparency and increase efficiency in its operations.
“The demutualisation holds a number of significant benefits for the Nigerian economy including augmentation of Nigeria’s debt profile, increasing capital-raising capabilities, capital support for government initiatives, attraction of foreign and local investors and assisting corporate and financial institutions to raise capital,” she added.
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