The legislative framework for the demutualisation of the Nigerian Stock Exchange (NSE), which will see sub-Saharan Africa’s second biggest bourse become a public listed company, has scaled through second reading on the floor of the House of Representatives.
In his lead debate, Tajudeen Yusuf (PDP-Kogi) who sponsored the bill, explained that the bill seeks 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 to provide for other related and ancillary matters, 2007.
The NSE, currently owned by stockbrokers and some institutional investors, is the second biggest bourse in sub-Saharan Africa after the Johannesburg Stock Exchange which was demutualised in 2006.
When finally demutualised, the NSE will join a host of other African securities exchange like the Nairobi, Mauritius, Seychelles, Rwandan, Casablanca stock exchanges and BRVM.
The stock market in Africa’s largest economy was, until 2013, one of the world’s best performing frontier markets, but low liquidity levels and currency restrictions have now deterred foreign investors.
In his lead debate, Tajudeen Yusuf (PDP-Kogi) who sponsored the bill, explained that demutualisation will improve liquidity, promote the competitiveness and attractiveness of the domestic capital market, as well as engender good corporate governance and boost investors’ confidence.”
“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 bill states.
After the debate on the bill, Speaker Yakubu Dogara referred it to the House Committee on Capital Markets and other Institutions for further legislative action.
KEHINDE AKINTOLA (Edited by Lolade Akinmurele)