The Association of Stockbroking Houses of Nigeria yesterday enjoined the management of the Nigerian Stock Exchange to pick a date for its Extra-ordinary General Meeting on demutualization, to allow more consultations on the exercise.
Demutualization is the process of transforming a stock exchange from being a self-regulatory organization, like the NSE, with no shareholdings, to a public company that is shareowner-based and profit-seeking. It allows the shares of an exchange to be quoted on its floor.
The market operator explained that the exercise would provide access to more capital to exchanges and that such capital had enabled stock exchanges like those of New York, Australia and Stockholm, among others, to meet their needs and stay competitive without necessarily placing additional financial burden on participants.
Speaking during the exchange’s 55th AGM, the ASHN President, Emeka Madubuike, urged the managements of both the NSE and Securities and Exchange Commission to fast track the process.
Madubuike said, “Since the first demutualisation of Stockholm Stock Exchange in 1993, about 30 stock exchanges have concluded the process. Over 80 per cent of the World Federation of Exchanges are currently demutualized, with some publicly listed.”
Meanwhile, the President of Council, NSE, Mr. Aigboje Aig-Imoukhuede assured stakeholders at the meeting that the council would ensure that the process was started and completed in due season.
Aig-Imoukhuede noted that the exchange weathered the impact of capital flight shocks experienced globally through effective fiscal discipline and tight budgetary controls.
“Although 2015 was characterised by recessionary pressures, including a slump in crude oil price, uncertainty in Nigerian economic policies and significant local currency exchange rate pressures, our management and staff successfully delivered on a number of ambitious operational and strategic initiatives.
“We recorded an operating surplus of N1.86 billion as a result of management diligence in managing the budget as well as strategic prioritization and execution of key initiatives based on efficiency, scale and growth potential. Total assets of The NSE grew by over 10 per cent, while net assets grew by 11 per cent, year-on-year. By the end of the year, the exchange’s asset base exceeded N22.78 billion, with N19.29 billion in accumulated funds, providing us adequate financial flexibility to support strategy execution in key business areas for the road ahead,” he added.
