Nigerian Stock Exchange begins demutualization

The Nigerian Stock Exchange (NSE) announced on Thursday, March 30, 2017 the approval of the demutualization process by members of the Exchange.

NSE

The decision was reached at the extra-ordinary General meeting its member held on the same day at the Exchange House, Lagos.

Demutualization connotes a process of converting a member-based organization to a shareholder-owned organization. This also change its purpose from non-profits to profits making organization. Historically, stock exchanges are promulgated by law, self-regulating and mutually governed with profits making is not a strong motive of operation.

Speaking on the outcome of the meeting, Mr. Aigboje Imoukhuede, the President of National Council, Nigeria Stock Exchange, said “this approval of the NSE demutualization plan marks the achievement of an important milestones towards completion of the exercise”.

He further stated that ‘the demutualization of the Exchange will bring Nigerian capital market at par with other major exchanges. While noting that this would enhance governance, transparency and visibility whilst attracting more strategic partners, investors and good quality issuers...’

Also commenting on the development, the CEO of NSE, Mr. Oscar Onyema, stated that the approval of the demutualization process will generate sustanital motivation for the development of an agile Exchange thereby consolidating its innovativeness and strengthening its leadership at both local and international levels whilst adding value to its stakeholders.

NSE commenced the process in 2015 by appointing a consortium of Rand Merchant Bank, a South-Africa Investment Bank, and Chapel Hill Denham, a leading Nigerian investment bank, as the financial advisers of the process.

The first country to demutualized its stock exchange is Sweden, Stockholm Stock Exchange, in 1993. Major stock exchanges such as New York Stock Exchange, Chicago Mercantile Exchange, London Stock Exchange, Australian stock Exchange, Deutsche Börse, Toronto Stock Exchange, Singapore Stock Exchange and other stock exchanges have also been demutualized.

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