Monday, April 21, 2014

Nigeria Stock Exchange to attract new listings, unveils Value Added Services

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Nigerian Stock Exchange Trading floor [Photo: blogs.cfr.org]

The new services aim to promote fairness, transparency, accountability and integrity in an organisation’s relationship with all its stakeholders

In a bid to attract new listings, create a competitive edge for listed companies, retain current listings, and improve investor interest in the market through enhanced information, the Nigerian Stock Exchange, NSE, has unveiled a new concept of value added service.

Speaking to financial journalists and investment analysts on the new initiative, the Head of Listings Sales and Retention of The Exchange, Taba Peterside, said the services aim to assist listed companies in complying with post listing obligations and retaining their listing status.

“We are partnering with various local and international organisations to provide services such as: Corporate Access, Investor Relations, Institutional Services, Corporate Governance and Independent Equity Research to enhance the value proposition of listing on The Exchange” she said.

Through training programmes for directors and other stakeholders, the service aims to promote fairness, transparency, accountability and integrity in an organisation’s relationship with all its stakeholders with a view to increasing shareholder value, Ms. Peterside explained.

She said that the Exchange would engage independent investment research firms to produce company reports for the investing public.

“The focus is on less visible listed companies that are not covered by sell-side analysts. The aim is to raise the company’s profile and visibility with investors and ultimately lead to more interest and activity on its shares. Reports will be made available for sale through a portal on The NSE’s website”, she said.

Ms. Peterside explained that a well-designed investor relations programme would help to enhance the understanding of a company’s strategic direction by the investor community; encourage informed deliberation and analysis among investors and analysts on company’s performance through the provision of timely, appropriate and accurate information.

The bourse also intends to aid Small and Medium scale Enterprises, SMEs, in the design and documentation of appropriate internal business structures, management processes and procedures to position them as world class enterprises.

Earlier in the week, the Exchange made history as it became the first Capital Market Operator in Africa to launch The NSE Market Quality Report (X-Qual). The NSE Market Quality Report was introduced to key stakeholders at the Nigerian Capital Market Committee Retreat and Conference in Warri, Delta State, earlier in the week.

According to the Chief Executive Officer of The Nigerian Stock Exchange, Oscar Onyema, the NSE Market Quality Report is designed to disclose the extent to which equities traded at the Exchange provide executions at prices better than the prevailing price quotes before an investor places an order.

He explained that Nigeria has no rules governing the disclosure of order execution and routing practices but in developed markets, there are rules that require and govern such disclosures.

He added that the new initiative, which is based on the US Sec Rule 605 market execution disclosure requirements, would improve on the quality of liquidity, transparency and disclosure in the Nigerian bourse.

“The information will no doubt enable analytical investors or broker-dealers gain a better understanding of how best to execute orders in the market and the quality of execution they can expect for the different stocks being traded”, he said.

The nation’s capital market recorded its highest growth with market indices growing by more than 20 per cent making it the best quarter since December 2008.

Market capitalization rose by 20.12 to close the third quarter at N8.282 trillion, while the All-share index rose by 20.43 per cent or 4,412.07 basis points to close the quarter at 26,011.64 points from 21,599.57 the previous quarter.

The Lagos Chamber of Commerce and Industry, in a report analysing the 4th quarter of the economy said the progress is strengthened by the renewed interest of foreign investors in the Nigerian capital market and the commencement of a number of new initiatives by the NSE designed to enhance market efficiency.

“Some of the factors that drove performance in the capital market include: impressive company earnings from quoted companies, good company corporate actions (dividends and bonuses), attractive valuation of quoted companies and commencement of Market Making activities.

Other factors are: stability in foreign exchange rate, a moderation in the inflation rate, increase in external reserves and increase in the price of oil (Bonny Light) at the international market.

Some finance experts have said that Nigerian stocks are awaiting a new catalyst. It is believed that these new initiatives being introduced would help boost the stocks’ value.

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