Demutualisation is not the solution for the NSE —Okezie

The demutualisation of the Nigerian Stock Exchange (NSE) is not the solution to the downward trend witnessed in the capital market.

Mr Boniface Okezie, who is the Chairman of Progressive Shareholders Association disclosed it at the weekend.

He said: “Demutualisation will not bring solution to the NSE. It is not what we want but if it becomes inevitable, they should revisit the plan drawn up by the former NSE boss, Ndi Okereke Onyiuke and they must follow due process.”

Demutualisation of a stock exchange refers to the process by which a member-owned exchange is reorganised as a shareholder-owned exchange, thereby switching from private to public ownership.

Recall that the NSE Chief Executive Officer (CEO), Oscar Onyema, disclosed recently, during NSE yearly review held in Lagos  that the process of demutualising the exchange would take some time to be completed because of the volume of work involved in the process and is optimistic of an accelerated progress within the current year.

He said: “Demutualisation can take any time from 18 months to five years to accomplish especially when you want to put some thing in place like make a new law but a lot of work is going on in that regard and we would see an accelerated rate of progress this year.”

Reacting further, Okezie stressed the need for the Exchange to follow due process and ensure that every Nigerian in the country and in the diaspora benefits from it by giving them the opportunity of owning stakes in the Exchange.

He, however, maintained that rather than focus on demutualisation, the NSE should dwell more on increased transparency on the NSE, investor protection, among other values.

“Demutualisation is not the solution. Transparency, investor protection, building investor confidence is what we need. Let them revisit the original plan. For those who want to hyjack it, we are checkmating them if they do their own hidden agenda, there will serious problems. All hands must be on deck to ensure that it is successful,” he noted.

Notwithstanding the current downward market posture, Mr Tony Mordi, a Senior Stockbroker with APT Securities sees some green light in the demutualisation of the NSE, which, to him, is more  of advantage than disadvantage to the bourse.

“The prospects appear to outweigh the constraints. Remember that the NSE is a Self-Regulatory Organisation (SRO), guaranteed by the dealing members. Dealing members are the shareholders of the NSE. If the NSE is demuitualised, dealing members can include their share value as an asset in their balance sheet and that will improve their shareholders’ funds.” 

Source : Tribune

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