A Presidential Endorsement for NGX

MONEY

Festus Akanbi

President Muhammadu Buhari last Wednesday threw his weight behind the ongoing transformation of The Exchange Group, saying the recently concluded demutualisation of the group should be seen as a proud moment for Nigerians.

Buhari’s endorsement was in consonance with the excitement and optimism expressed by shareholders and investment analysts who spoke with our correspondent on Friday.

According to him, the history of NGX Group was tied to that of the nation itself founded 61 years ago at a pivotal time when Nigeria gained her independence.

Speaking at the Closing Gong Ceremony held virtually, Buhari noted that the exchange continued to play its part in nation-building by stimulating economic growth and providing a platform for businesses and individual to save and raise capital through innovation, diversified products and services, enabling regulatory environment and much more.

“The occasion of the demutualisation of The Nigerian Stock Exchange is yet a proud moment for all of us, and indeed all Nigerians deserve congratulations for this feat as it is the beginning of a new era for the capital market,” he said.

Shareholders’ Expectations

Presenting the interest of shareholders, National Leader Emeritus, Independent Shareholders Association, Sir. Sunny Nwosu, told THISDAY the transition of the exchange was a welcome development.

However, he stressed the fact that the development has placed the exchange in competition with other stocks and that it would be expected to pay dividends to shareholders and it would be expected to ensure the operation of corporate governance in its activities.

“It will have to avoid power play since it is now at the same level with other companies.”

In his opinion, the Founder and Chairman, Proshare Nigeria Limited, Mr. Femi Awoyemi said “The demutualisation of the Nigerian Exchange is expected to improve the Corporate governance structure of the entity. I expect to see less or no SEC intervention in the leadership of the Exchange i.e. the Arunma Oteh/Ndi Onyuike-Okereke Scenario; the NSE management/Council power tussle between Alhaji Aliko and Prof Ndi Onyuike-Okereke…”

Awoyemi, who is also an investment coach, explained further that the emerging entities, listed on NASD, will give interested publics the opportunity to invest in the entity and be part of the decision making process that can help unlock more potential opportunities.

“Also, with the right market related laws put in place, the demutualisation can help to get new companies on board to list, this will improve the market capitalisation of the entity and this may eventually be the driving factor that will help the Exchange achieve the $1trn Market CAP set by Oscar Onyema, during his first tenure.”

The Transformation

As part of its transformation agenda, the NGX Group, on May 18 kicked off a campaign, “The Stock Africa Is Made Of” to amplify its new positioning and commitment to the African financial markets as a leading capital market infrastructure provider, connecting Nigeria, Africa, and the world. The campaign which also spotlights the growth potential of the African continent was supported by President, Muhammadu Buhari.

The Group Chief Executive Officer, NGX Group Plc, Mr. Oscar Onyema, in his speech said “The Stock Africa Is Made Of” campaign is built around the new corporate identity. He explained further that the campaign emphasises the vibrancy and dynamism of NGX Group and its subsidiaries, adding that it provides stakeholders with an unforgettable experience through creative messaging and opportunities for direct engagement with the brand.

“Our goal is not only to celebrate this pivotal point in our journey but to also show our stakeholders that we are ready and able to explore new frontiers in our quest to be the partner and platform of choice for meeting their business, financial and investment objectives”, Onyema stated.

The kick-off event, which held virtually, consisted of two parts – the official unveiling of the new brand and positioning, and a Closing Gong Ceremony where President Buhari sounded the virtual gong to bring the day’s trading to a close.

Speaking at the unveiling event, the Chairman of Nigerian Exchange Group Plc (NGX Group), Otunba Abimbola Ogunbanjo, stated, “The Exchange has come a long way, through different leadership regimes – civilian and military – that have overseen multiple booms and bust economic dispensations within the Nigerian economy, to emerge as a leading integrated market infrastructure in Africa and as the engine of growth for Africa’s largest economy.”

He explained that with demutualisation, NGX Group is well positioned to enable strong economic growth and contribute its quota to the development of the Nigerian capital market, and the African Continent.

Demutualisation is a process that changes a mutual or cooperative association into a public company by converting the interests of the members into shareholdings. These holdings can then be traded like the shares of a company. The idea is to change the structure of exchanges that were originally formed as trusts.

It is also an idea that had taken root in developed economies long before it materialised in Nigeria. Since the first demutualisation of the Stockholm Stock Exchange in 1993, leading stock exchanges, such as the New York Stock Exchange, London Stock Exchange, Toronto Stock Exchange, Singapore Stock Exchange, and Australian Stock Exchange have followed suit. Some stock exchanges in emerging market jurisdictions also followed suit. The NSE will become the 57th stock exchange to do so.

New Structures

Demutualisation, therefore, led to a change in the structure of the old Nigeria Stock Exchange, giving rise to Nigerian Exchange Group (NGX Group) Plc, a non-operating holding company with three subsidiaries – Nigerian Exchange (NGX) Limited, the operating exchange; NGX Regulation (NGX RegCo) Limited, the independent regulatory arm; and NGX Real Estate (NGX RelCo) Limited, the real estate company.

A major announcement that quickly followed the restructuring was the appointment of leaders for the group and its subsidiaries. Following the approval of SEC, the erstwhile Chief Executive Officer (CEO) of former NSE, Onyema, having completed his 10-year tenure was appointed as the Group Chief Executive Officer, NGX Group Plc.

Onyema joined the former NSE in 2011 in the wake of a takeover by the Securities and Exchange Commission (SEC). Before relocating to Nigeria, he served as Senior Vice President and Chief Administrative Officer at American Stock Exchange (Amex). He also ran the NYSE Amex equity business following the merger of NYSE Euronext and Amex in 2008.

For NGX Ltd, Mr. Temi Popoola, was appointed as the chief executive officer. A Wall Street-trained investment banker, Mr. Popoola joined NGX Ltd. from Renaissance Capital (Rencap) where he was Managing Director and CEO for West Africa.

Ms. Tinuade Awe was appointed as the CEO, NGX RegCo Ltd. Before attaining this position, she was the Executive Director, Regulation at The Exchange. She also served as the General Counsel and Head of the Legal and Regulation Division, as well as Council Secretary before becoming an Executive Director.

Speaking on the new brand identity, Onyema, stated that the new identity is a reflection of the resolve to deliver superior value to stakeholders.

He said, “We are very excited about the launch of our new brand identity and website at this pivotal time in our history.

“Influenced by the dynamism and resilience of our market in both good and challenging times, our new identity, which builds on our rich heritage, reflects who we are today, our ambitions for the future, and our resolve to deliver superior value to our stakeholders.”