The Nigerian Stock Exchange on Tuesday launched a new listing platform called the Premium Board along with an associated Premium Board Index.
According to the Exchange, the move is in keeping with its commitment to promoting Africa’s biggest companies and influencing the economic growth and development of the Exchange and Nigeria as a whole.
The new listing platform is designed to 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 Premium Board Index, on its part, is an equity index designed to provide a benchmark to capture the performance of companies listed on the Premium Board and a basis for developing products (such as ETFs and equity index derivatives) that are tradable on the Exchange.
The companies that have qualified for the Premium Board are Dangote Cement Plc, FBN Holdings Plc, and Zenith International Bank Plc with market capitalisation of N2.87tn, N277.70bn and N587.43bn, respectively.
The Exchange said the three companies all passed the Corporate Governance Rating System before applying for the Premium Board.
The Chief Executive Officer, NSE, Mr. Oscar Onyema, explained that the launch of the new listing platform and index was influenced by the Exchange’s goal of promoting corporate governance in Africa.
He said, “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.”
He explained that the PMI would serve as a benchmark for investors looking to track the performance of large firms with excellent corporate governance and sustainable business models.
Onyema, who said that typically, similar indices outperform their market-wide index by double digits, added that the NSE PMI had a four year average return of 17.65 per cent versus the All Share Index return of 11.31 per cent over the same period.
Also at the event, the Executive Director, Business Development, NSE, Mr. Haruna Jalo-Waziri, explained that the launch of the new board and index were in line with the NSE’s commitment to promoting and continuously developing a more transparent, liquid, accessible market.
He said, “The Premium Board is for issuers with minimum market capitalisation of N200bn and highest corporate governance standards. Companies aspiring to be listed on the Premium Board must achieve a minimum score of 70 per cent on the stringent Corporate Governance Rating System.
“In addition, they are required to maintain a minimum free float of 20 per cent of their issued share capital or a free float value equal to or above N40bn.”
Source : Punch