Nigeria stock exchange looks on course to list its own shares

By Chijioke Ohuocha and Camillus Eboh
LAGOS/ABUJA – A bill that has passed a second reading by Nigeria’s parliament could pave the way for the Nigerian Stock Exchange to issue its own shares, a draft of the bill seen by Reuters showed on Wednesday.

The exchange wants to change its ownership structure from a mutual firm of broker members to one owned by shareholders, in an effort to improve governance and possibly open up new funding sources, including a possible share offer.

Members have given the exchange, which is one of the main entry points for foreign funds into Africa, the go-ahead to become a listed company.

The bill now passing through parliament would put in place a legal framework that would help it form a board and pay taxes from any profits. The exchange is now governed by a council appointed by members.

The exchange’s chief executive, Oscar Onyema, told Reuters in March that he expected the bill to pass this year with the government supporting the listing.

Onyema has said the conversion will transform the exchange into a for-profit organisation that offers products beyond equities, bonds and exchange-traded funds.

The Johannesburg Stock Exchange, the continent’s most developed stock market, has been a listed company since 2006.

The equities market in Nigeria, Africa’s largest economy, was until 2013 one of the world’s best-performing frontier markets. But a shortage of liquidity and currency restrictions have spooked foreign investors.

Nigerian shares shed 6.2 percent last year and slumped 40 percent in dollar terms, after the naira lost a third of its value in a currency crisis. Stocks have recovered to gain 22 percent this year.

The currency crisis also helped tipped the economy, which has been hobbled by low oil prices, into its first recession in over two decades last year.

Nigeria, the second-biggest stock exchange in sub-Saharan Africa after Johannesburg, has around 200 listed companies, all included in its benchmark share index

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