Nigerian Bank Nigeria Nigeria Stock Exchange – Money Bags Will Not Hijack NSE Demutualisation DG Assures

Source allAfrica.com: Kingsley Ighomwenghian, 12 January 2010

Against the backdrop of fears being expressed in different quarters, the Nigerian Stock Exchange (NSE), on Tuesday assured that its planned demutualisation programme would not be hijacked by moneybags or any section of the country.

Demutualisation is a process where a member-owned, managed and non-for-profit institution, such as a stock exchange, transforms to a for-profit, shareholder-owned corporation.

Addressing a world press conference on the review of Nigeria’s market performance in 2009 and the outlook for this year, Prof. Ndi Okereke-Onyiuke, director-general of the NSE, explained that project is ongoing and not cancelled as most people believe. It was only put on hold, she said, because it became inauspicious due to the sentiment at that time when the market meltdown was raging. According to her, people misunderstood the demutualisation idea and thought moneybags would hijack the process, which she said, is a gradual and would take between three to five years.

Mrs. Okereke-Onyiuke recalled that nobody gave the Central Securities Clearing System Limited, its clearing house, any chance of survival. The process was smooth, she continued, with only stockbrokers, banks, pension funds and other institutional investors as shareholders, leaving the NSE with just 30 per cent stake. “When we want to demutualise NSE, no group or individuals will be allowed to hijack it. Nobody will hijack the NSE through demutualisation, whether I’m here or not,” she stressed.

To buttress her point, the DG noted that the NSE council will continue discussions on it, at its upcoming maiden meeting for the year, adding that there is already a council committee in place. A second and enlarged committee comprising other stakeholders is to be constituted, she added, noting the desire by the Securities & Exchange Commission (SEC) to play a role in the entire process.

She noted that the NSE is trudging on with its demutualisation at a time, when most African exchanges noted during the African Stock Exchanges Association (ASEA) conference, hosted in Abuja, that the process could be hijacked by foreigners, who would then take over their exchange.
Okereke-Onyiuke explained that, a marketing company would be commissioned to help explain the benefits of demutualization to the various stakeholders, adding that the entire process will be transparent. Further information about the demutualization, she continued, will be released by the council comprising 17 members, eight of which are stockbrokers.The DG refused to give details about the succession plan ahead of her retirement at the end of this year, noting that she stands by her determination to retire on attaining the age of 60.

“I have not changed my mind, it was a voluntary decision. I will be 60 on November 2, 2010. I don’t intend to work after that time,” even as she noted that two members of her senior management have already retired and that she would leave voluntarily with another official.

The DG linked the growth recorded by the twin basic indicators for the seventh consecutive trading session since the beginning of the year, to the realization by investors both foreign and local that stock prices have hit rock bottom and can only begin to rise.

Nigerian Bank Nigeria Nigeria Stock Exchange