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NSE to hire external advisers for demutualisation exercise

By on January 26, 2014

Chief Executive Officer of the Nigerian Stock Exchange, NSE, Mr. Oscar Onyema, has said that arrangement is underway to hire external advisers that will champion the demutualisation of the stock exchange.

He made the remark in an interview at the ongoing World Economic Forum, WEF, in Davos,Switzerland.

Meanwhile, demutualisation is a process where stock exchanges transform into a Public Limited Liability Company (PLC) and by implication a profit making organisation listed on itself and any other Exchange around the world.

With demutualisation, investing public will have the opportunity to trade on the shares of the Exchange just like any other quoted company. Where it is implemented, the exercise usually results into members of the public holding 51 per cent of the demutualised company’s equity capital.

At the moment, the NSE is a private company established by an Act of Parliaments and owned by members comprising  stock brokers and ordinary members.

Attempt at demutualising the NSE was first made in 2008, but was later put on hold the following year due to disagreement among the current members.

Onyema had fortnight ago at a world press conference to review the market activities in 2013, said that the committee constituted by the Exchange has submitted plans for  the demutualistion, but the management of the Nigerian Stock Exchange was yet to review it and take decision on it..

Speaking at the WEF, he noted that detailed plans for sale of the NSE would soon be submitted to the Securities and Exchange, SEC, for approval so long as there are no legislative issues.

Speaking further, he said that the uopcoming general election in 2015 would probably cause unease for investors in the capital markets as the Federal Reserve continues with tapering its quantitative easing program.

“The uncertainty around the election presents challenges for us. International portfolio managers will be more discerning.”

 

[Vanguard]