By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Three (3) firms on the Nigerian Stock Exchange (NSE) which include cement producer and the highest capitalised company, Dangote Cement Plc, financial holdings group, FBN Holdings Plc and Nigeria’s top tier lender, Zenith Bank Plc on Thursday listed shares worth N3.74 billion on the newly launched Premium Board.
A breakdown shows that Dangote Cement, FBN Holdings and Zenith Bank listed N2.87 trillion, N277.70 billion and N587.43 billion respectively.
Oscar Onyema, chief executive officer (CEO) of the NSE at the occasion said the companies all passed the Corporate Governance Rating System (CGRS) before applying for the premium board.
Onyema said the new listing platform is simultaneously being launched with the associated Premium Board Index and would feature companies that meet the Exchange’s most stringent listing criteria of capitalisation, governance and liquidity.
“It aims to provide a platform for greater global visibility for eligible African corporates to make it easier for them to attract global capital flows and reduce the cost of funding,” the NSE CEO affirmed.
According to him, the Premium Board Index on the other hand, is an equity index designed to provide a benchmark to capture the performance of companies listed on the Premium Board. “The index will also provide a basis for developing products (such as ETFs and equity index derivatives) that are tradable on the bourse,” he added.
“The Exchange is a member of the United Nation’s Sustainable Stock Exchange Initiative, which is designed to encourage stock exchanges to influence their ecosystem to adopt sustainable ways of doing business around Environmental, Social, and Governance dimensions. The Premium Board is one result of our commitment to place corporate governance front and centre as a way to improve the climate for doing business in Africa. We expect that companies on the Board will enjoy the highest levels of visibility and appeal to investors looking for large companies with the highest standards of corporate governance,” Onyema said.
The NSE CEO disclosed that the Premium Board Index would serve as a benchmark for investors looking to track the performance of large firms with excellent corporate governance and sustainable business models. “Typically, similar indices outperform their market wide index by double digits. The NSE Premium Board Index had a four (4) year average return of 17.65 percent versus the All Share Index return of 11.31 percent over the same period,” he said.
Onyema says the Premium Board is for issuers with minimum market capitalisation of N200 billion and highest corporate governance standards. “Companies aspiring to be listed on the Premium Board must achieve a minimum score of 70 percent on the stringent CGRS. “In addition, they are required to maintain a minimum free float of 20 percent of their issued share capital or a free float value equal to or above N40 billion,” he added.
