By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The Nigerian Stock Exchange (NSE) could decide to do an initial public offering (IPO) after demutualisation of the bourse, Oscar Onyema chief executive officer (CEO) of the NSE disclosed to Reuters late Tuesday in Kenya.
He said its changing ownership structure from a mutual company of 240 members in order to add shareholders.
According to Onyema, demutualisation will help the exchange improve its governance through opening up its ownership which could lead to raising fresh funds to support expansion.
“Once we have completed demutualisation, a decision will be made as to whether go straight and do an IPO or whether we will do strategic partnerships or whether we will do private equity funding,” the report quoted Onyema as saying.
However, the report did not state when the process would complete; but attempt at demutualising the NSE was first made in 2008, and until now the plan is still on the pipeline.
In September the Nairobi Securities Exchange (NSE) said it raised 627 million Kenyan shillings ($7.1 million) for expansion in an oversubscribed IPO as part of plans to demutualise the bourse.
With the completion of the IPO, the Kenyan bourse became the second African exchange after the Johannesburg Stock Exchange (JSE) to be demutualised.
Meanwhile Onyema disclosed the Nigeria’s Exchange plans to start allowing trading by 2016 on derivatives such as futures and options in interest rates, currencies and equity indexes.
He affirmed the NSE’s surveys showed there was “encouraging” demand for derivatives, which help investors to manage the amount of risk they take on.
Currently, the NSE only offers shares, bonds and the exchange-traded funds (ETFs).
“Our target is to really get them by 2016 at the latest; we are setting up a clearing house, which required significant investments,” the CEO at the Nigerian bourse said.
He added that all the major banks needs to buy into the idea and support the development of such an institution.
Onyema further affirmed that the 2015 presidential election has been feeding jitters to the Nigerian equities market.
“We are just going through a cycle and I believe that given the fundamentals, how strong the listed companies are … we expect to see the market return in a strong way,” he said.
