Nigerian Exchange Group Plc has had an excellent start to trading its shares on its own securities exchange after listing by introduction on 15 October at NGN16.15 per share (market capitalization NGN 31.7 billion/ $77.2 million) before an active first day saw it soar to NGN 17.75. Last week (starting 18 Oct) it topped at NGN25.90 and closed 23 October at NGN 23.55. Since Friday it has slid back and closed 26 October at NGN 19.65 for a market capitalization of NGN 38.6bn ($94m).
NGX Group on 15 October announced the listing of its shares on the Main Board of Nigerian Exchange Limited (NGX). The total issued share capital of 1,964,115,918 shares of 50 kobo each were admitted to trade in the Financial Services and Capital Market Infrastructure sector and under ticker NGXGROUP.
This is the end of a 4.5 year process of demutualization, by which the group changed from being a mutually owned not-for-profit entity limited by guarantee into a for profit company owned by shareholders. Exchanges around the world have gone through this transformation, enabling them to raise capital and to grow fast as capital market opportunities arise.
NGX is the fourth African securities exchange to demutualize and list, following JSE in South Africa, Nairobi Securities Exchange and Dar es Salaam Stock Exchange. The Nigerian Exchange Group Plc shares were added to the FTSE MondoVisione Exchanges Index with the opening of trading on 22 October, according to Mondovisione news.
Nigeria’s potential
Nigeria is Africa’s biggest economy, with huge growth potential, and the NGX and other capital market stakeholders have dynamic management and are excellent at realizing strategic opportunities.
The exchange group had satisfied the Listing Requirements of the NGX and obtained relevant regulatory approvals including from NGX Regulation Limited. A copy of the NGX Group Listing Memorandum (listing by introduction) is available on the NGX investor relations website.
Group Chairman of Nigerian Exchange Group Plc, Otunba Abimbola Ogunbanjo said in a press release (obtained via website African Markets): “Our shareholder base has more than doubled since our demutualization in March 2021 and our valued shareholders will benefit from the enhanced liquidity that listing on The Exchange will facilitate. This listing will also enable a much wider universe of potential investors and market participants to share in our growth journey.”
Oscar Onyema, Group Managing Director/CEO, said: “Today’s listing of NGX Group on the nation’s premier Exchange, NGX, will enable institutional investors globally as well as the Nigerian public to invest in Nigerian Exchange Group Plc.
“With strengthening market dynamics, serving the largest economy in Africa, NGX Group’s listing allows us to expand in key capital market infrastructure verticals and look beyond Nigeria’s borders, as we deliver on our growth plans to become Africa’s leading capital market infrastructure group.”
Stockbrokers to the listing were Chapel Hill Denham Securities Limited and RMB Nigeria Stockbrokers Limited, the Financial Advisers were Chapel Hill Denham Advisory Limited and Rand Merchant Bank Nigeria Limited, and Aluko and Oyebode acted as Legal Adviser.
Background
NGX Group is the holding company and owns controlling stakes in the NGX Limited, NGX Regulation Limited (the regulatory arm) as well as NGX Real Estate. It oversees management resolutions but does not direct involved in their day-to-day running.
This comes after a long process of demutualization, first launched with resolutions from the former members at an Extraordinary General Meeting in March 2017. For a great account of the background read this interview with CEO Onyema on Nasdaq website . The President of the Federal Republic of Nigeria Muhammadu Buhari signed the Demutualization of The Nigerian Stock Exchange Bill into law in August 2018.
There was a letter of “no objection” from the Securities and Exchange Commission Nigeria in December 2019 (also see our story) which paved the way for another EGM (court ordered meeting) in March 2020 where members unanimously agreed the resolutions. The Federal High Court, Lagos, granted an order in May 2020, leading up to final approvals from SEC and the Corporate Affairs Commission.
In April 2021 the Nigerian Exchange announced its rebrand as Nigerian Exchange Group Plc (NGX Group) with three subsidiaries, Nigerian Exchange Limited (NGX) which operates the securities exchange, NGX Regulation (NGX RegCo) which is the independent regulatory arm of the Exchange, and NGX Real Estate (NGX RelCo). For full details see the NGX press release.
UPDATE 17 NOV – Nigerian Exchange Group Plc was added to the FTSE MondoVisione Exchanges Index on 22 October.
