Nigerian Stock Exchange

Raheem Akingbolu takes a look at the ‘Indicator’, the first edition of the annual review of the Johannesburg, Nairobi and Nigerian stock markets, concluding that the publication will go a long way in positioning Nigeria as an investment haven and educate the public on the activities of Africa’s major bourses

In content, colour and packaging, the first edition of Indicator, a joint publication by the Johannesburg, Nairobi and Nigerian Stock Exchange meet international standard. The 134 pages glossy publication with the cover story ‘Leading the Way: Unlocking Africa’s Investment Potential,’ gives a thorough insight into the activities and opportunities in the three most viable economies in Africa.

The preface of the magazine is jointly written by the Chief Executive Officer of the Johannesburg Stock Exchange, Nicky Newton-King, the CEO of Nairobi Securities Exchange, Geofferey Odundo and the CEO of Nigerian Stock Exchange, Oscar Onyema. The tone of the language used in the preface indicates a positive commitment for cooperation and development of the entire African nations. They succinctly tell the world that “Africa is currently on a journey, one to greater social development and economic growth; a journey that will have immense benefits for our continent,”

With the above declaration, they welcome readers to Indicator Magazine, which according to them, is a signpost on this journey. It is admitted here that Africa’s rise – over the past 10 years in particular – has been remarkable. According to them, many African nations have grown at high rates and despite the recent volatility in the global economy, sub-saharan Africa continues to mostly outperform the rest of the world’s growth rates. They argue that the change in policy too has been optimistic and that African governments by and large have welcomed a more encouraging private – sector focused legislative environment.

“At the forefront of the last decade’s growth have been Africa capital markets. We are proud of the role we ‘ve played in enhancing and leading development and growth, and believe that we will have an even bigger part to play in the time to come,”

In driving home their point, the CEOs opine that a strong, sustainable and liquid capital-market ecosystem will help unlock the continent’s potential. To this end, they point out that perhaps the most important element is for the players in the market to work in unison to reach the targeted goals of the continent. To them, co-operation will strengthen African institutions, adding that economic drivers from the various countries will need to keep learning from one another to accomplish together. As the nations contend with the 2016 challenges and opportunities, they said much is demanded from all stakeholders to weather the storm and come out victoriously as an economic viable continent.

NSE in focus

On page 89, which is an opening page for Nigerian Stock Exchange in the magazine, the pictorial view of the Lagos Waterfronts and the city landmarks are used to show the alluring Nigerian environment as not only a business community but a good tourism site. The picture also shows the aerial view of various offices in the commercial city, which is greeted with dazzling attractive lights.

Then the CEO interview follows on page 90, where Mr. Oscar Onyama, spoke on demutualisation, the value of deepening Africa’s capital markets and the need to enhance sustainable business practice. In the interview titled; ‘We Will Continue to Strengthen Our Regulation’ Onyeama starts with his vision for NSE in 2016. He said the exchange will focus on executing its strategy in order to continue to provide a credible platform for financing the economy. To this end, he said his team intends to intensify engagement efforts with the federal government of Nigeria. The CEO also disclosed that NSE, under him, has also prioritised three initiatives (demutualise the NSE, establish a derivatives market and monetise the market service suites) for 2016. According to him this is aimed at achieving the exchange’s three strategic objectives of growing the number of new listings across five asset classes; increasing order flow in the five asset classes; and operating a fair and orderly market based on just and equitable principles.

He admitted that the downturn from 2015 has already continued into the New Year but quick to add that the organisation anticipates 2016 to be a challenging year for the capital market and domestic economy.

He said: “We intend to continue our collaborative efforts with the new administration and other private – sector players to create a framework for financing the nation’s infrastructure and capital requirements. Based on our track record and our future growth plans, we maintain a positive outlook for 2016,”

Speaking on the status regarding the demutualisation of the NSE, Onyema said is on course, especially with the appointment of Rand Merchant Bank and Chapel Hill Denham as financial advisers for the exercise. He stated that the appointment affirms the organisation’s commitment to achieving the demutalisation of the NSE in a methodical and transparent fashion.

Speaking further, he pointed out that the step is pivotal to a professional and successful conversion from a member-owned mutual organization to a stakeholder-owned public liability company that aligns with global best practices.

“The NSE has implemented a number of initiatives to strengthen and improve governance. The mutualisation process will contribute to the sustenance and enhancement of our governance. We are truly encouraged by the support from our stakeholders, particularly our regulator –The Securities and Exchange Commission – for creating the appropriate framework to accelerate a process that will engender a more open, transparent and credible exchange.

He pledged to strengthen the Exchange’s regulatory framework to enhance investors’ confidence in the nation’s bourse. The CEO noted that strong regulatory environment would protect investors against infractions, adding that sustainable investor protection framework would remain a key pillar in its agenda for the organisation.

Onyema said the focus of the various initiatives was to strengthen the regulatory framework to ensure a safe investment destination for both local and foreign investors and establish a favourable business environment for companies to thrive.

According to him, with immense support from capital market participants and various agencies in Nigeria, the NSE has made great strides in its transformation journey, which has brought about major review in market governance, structure and operations.

In the interview, Onyema went on to explain the role of capital market in facilitating long-term financing, mobilising resources, and directing the flow of savings and investments efficiently within African economies. He also made reference to the way the organisation is strengthening its operations through international partnership and development of good products to attract operators. Specifically, the CEO referred to the MoU the NSE signed with the London Stock Exchange and the 2014 admittance into the World Federation of Exchanges, which conferred a higher level of credibility and visibility upon the Nigerian Stock Exchange.

Benefits to Nigerians

Aside serving as a knowledge power house for Nigerians, especially the listed companies, the three interviews granted by the CEOs expose the public to the nitty-gritty of capital market practices in the three markets. Also, the magazine readily serves as a positioning tool for many Nigerian companies that see it as a veritable platform for advertising. This is shown in the number of Nigerian adverts and interviews in the magazine, including that of NSE. Indicator has also shown the place of NSE among the comity of nations as the country joins other leading markets to share information about the activities in the African continent.

To make it available for members of the public, a credible source within the NSE told THISDAY during the week that the magazine which is published without any price tag will be available for all listed companies. Beyond this, it was also disclosed that it may become an in flight journals in some selected Airlines in Nigeria and in some coffee shops. In line with the current global trend, the source further stated that plans to make it available online is at top gear and that interested members of the public will begin to read its soft copy in few weeks to come. Indeed, Indicator has indicated the way to go in 2016.