NSE Demutualisation Bill Passed to Boost Stock Market—Reps

By Modupe Gbadeyanka

Speaker of the House of Representatives, Mr Yakubu Dogara, has explained why the green chamber of the National Assembly passed the bill demutualising the Nigerian Stock Exchange (NSE) last week.

Speaking in a statement on Monday, Mr Dogara, through his media aide, Mr Turaki Hassan, explained that it was mainly in the interest of investors, the nation’s economy as well as the stock market.

According to the Speaker, with the local bourse being publicly quoted, it would open up the capital market and as well make it conform to global best practices and more attractive to investors.

Mr Dogara also noted that the change of the ownership structure of the NSE would bring the ordinary Nigerian closer to benefiting from the nation’s commonwealth because more multinational corporations will get their companies listed, thereby contributing to the development of the country’s economy.

Last week, the House adopted the recommendations of a report by its Committee on Capital Market and Institutions, Chaired by Mr Yusuf Tajudeen on a Bill for an Act to facilitate the development of Nigeria’s capital market.

The Bill will enable the conversion and re-registration of the NSE from a company limited by guarantee to a public company limited by shares and for related matters.

When concurred to by the Senate and signed into law by the President, the changes made by the House would bring more involvement of investors in governance.

Commenting further, the Speaker said the new arrangement would bring a flexible governance structure in the capital market, making it easy for decision to be made in response to changes in the business environment.

The change in the market structure would also afford investors increased access to resources for capital investment by way of equity offerings or private investment to raise funds.

In June 2016, while performing the closing gong during his visit to the stock exchange in Lagos, Mr Dogara pledge to use legislative tools to reposition the capital market for maximum performance.

He had described as unacceptable a situation where a large portion of the country’s resources or capital was heavily concentrated in the hands of few chief executive officers, CEOs of companies.

This situation, the Speaker pointed out, further widened the inequality gap, eliminates the middle class and plunges more people into abject poverty, thereby posing serious threat to the sustenance and survival of democracy.

Deepening of Nigeria’s capital market, he said, would enhance wealth redistribution and deliberately allow it to trickle down to the ordinary people as against the practice where multinational corporations repatriate their profits 100 percent to their own countries without investing back to the Nigerian economy.