Demutualisation critical for Nigerian capital market development – Finance minister


By Itohan Abara-Laserian
Lagos, May 18, 2021 The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, has described the Nigerian Stock Exchange demutualisation as a landmark transaction critical for the development of the Nigerian capital market.

Ahmed made the remarks at the virtual launch of the “The Stock Africa is Made of” campaign by the Nigerian Exchange (NGX) Group in Lagos.

The virtual event was held to amplify the NGX Group’s positioning and commitment to the African financial markets as a leading capital market infrastructure provider, connecting Nigeria, Africa and the world.

Ahmed said the demutualisation of the exchange was a landmark transaction that generated intense global interest and critical for the development of the Nigerian capital market.

“It is expected to deepen the investor base of the exchange as it unlocks opportunities for domestic and institutional investors to realise significant economic value by bringing the capital market in line with prevalent international practices and standards,” she said.

Ahmed said it would enhance corporate governance, transparency and global visibility while attracting global investors.

“This demutualisation will also drive technological improvement, enhance products and offerings and facilitate faster and more real time trading operations.

“This will have an impact on the nation’s capital market by enhancing the growth of the NGX to become the leading stock exchange on the continent as the link for significant investment in Africa’s largest economy.

“I am particularly delighted to see this milestone achieved and I believe that demutualisation will help facilitate enough capital to support the Federal Government’s initiatives and infrastructural projects.

“It will also help corporates and financial institutions in raising capital whilst allowing the exchange to position itself for multinationals and local participation in the market,” she added.

Speaking on the impact of the COVID-19 pandemic, she said Nigeria had been forced to adjust its comparatively domestic economic forecast due to the impact of the pandemic.

Ahmed noted that all hands must be on deck to build a resilient Nigeria in the face of significant long-term challenges and uncertainties.

The Minister of Trade and Investment, Otunba Adeniyi Adebayo, said that the demutualisation would strategically position the exchange to the global trading environment.

Adebayo said that the transformation from a member ownership to a public limited company would allow businesses to engage in more strategic partnerships, which would significantly impact the capital market.

Otunba Abimbola Ogunbanjo, Chairman, NGX Group, in his remarks, said that the Group would be better positioned to enable strong economic growth, while contributing its quota to the development of the Nigerian capital market.

Ogunbanjo said: “With demutualisation the NGX Group will be well positioned to enable strong economic growth and contribute its quota to the development of the Nigerian capital market.

“There are series of opportunities available through demutualisation which include, strengthened corporate governance framework, increased liquidity, expansion of ownership base thereby diversifying ownership risks and increases investor participation.”

Mr Oscar Onyema, the Group Chief Executive Officer, NGX Group, said that the new brand was capable of facilitating the formation of any new subsidiary by leveraging brand entity.

Onyema said: “The NGX brand identity follows the holistic brand architecture which will facilitate the formation of any new subsidiary by leveraging brand entity.

“The NGX brand is deeply rooted in drive principles, vision, aiming to be a leading force in customer experience creating loyal and delighted clients and stakeholders

“It is our vision to be the premier exchange hub for Nigerian businesses and for the wiser African economy.

“We believe the Nigerian capital market should play a role commensurate with Nigeria’s status as Africa’s largest economy