Lists benefit of demutualisation

THE Managing Director of Partnership Investment Limited, Victor Ogiemwonyi, has urged the Federal Government to enact law and speed up processes that would make it mandatory for the multi-national companies in the country to be admitted on the official list of the Nigerian Stock Exchange (NSE).

Ogiemwonyi, who urged Nigerians to emulate other emerging markets, which have laws compelling these multi-national to be quoted so as to deepen their capital markets noted that enactment of the law would help deepen the market and hasten its recovery.

“In Kenya, there is a law that compels companies to list their shares on the stock Exchange, while in Ghana, a law is already in process that will compel companies to list their shares for the benefit of their citizenry. In Ghana, there is law, which states that any company that seek license from the government, must list after five years. It is not a terrible thing to compel companies like MTN to list.

“MTN is already listed in South Africa. Even if its 25 per cent of its stake, not everything, would be good for us so that Nigeria can participate in the wealth they are making.   But we must give them a lot of incentives to ensure that they list. One of them is a demutualised Exchange. There would be reason why they would not want to list”.

Speaking on the advantages of demutualised exchange, the Managing Director said “the proceeds of demutualisation will be used to recapitalise the capital market. It will make NSE stronger, it will enable it catch up with technology, everybody will see transparency, accountability will be entrenched on the institution and everybody will contribute to it.

The success of demutualisation is dependent on changes in mind set on capacity, such that the “for profit” will help the exchange raise its level of competitiveness, operate in efficient manner and fulfill its regulatory obligations to ensure a fair market”.

Already, the newly approved technical committee on the demutualisation of the Nigerian Stock Exchange (NSE) is expected to submit its reports on how best to unbundle the operations of the Exchange.

This follows the time lag given by the Securities and Exchange Commission (SEC), to the 21 member technical committee headed by Asuelime Ighodalo to come up with advice on how to raise the level of the market to international standard.

Source: Guardian/Helen Oji