Nigerian bourse launches new index for SMEs to enable high growth companies access long term capital

NIGERIA – The Nigerian Stock Exchange has launched a new index called the ‘Growth Board’ for the Small and Medium Enterprises.

According to NSE’s Chief Executive Officer, Mr Oscar Onyema, the growth board aimed to encourage companies with high growth potential to seize the opportunity of raising long-term capital and promoting liquidity in the trading of their shares.

Onyema stated that the board also presented an avenue for companies in their growth phase to leverage the NSE’s platform and varied products and services to achieve their long-term business objectives.

 “From a growth perspective, Nigeria had the single largest representation with 97 companies featured in the 2019 Companies to Inspire Africa report jointly produced by the London Stock Exchange and the  PwC Africa,” Onyema said.

 He further noted that the high representation by Nigerian growth companies clearly emphasised the opportunities present in the segment and the nation at large.

The growth board was designed to offer relaxed entry criteria, as well as less stringent ongoing listing requirements to allow for greater accessibility to capital flows, global visibility and credibility through corporate disclosures, explained Onyema.

He noted that the growth board also restructured current market segments to better meet the needs along company’s entire lifecycle.

 This include the entry segment for companies with a market capitalisation from N50m (about US$138 million) and the standard market meant for institutions with a minimum market capitalisation of N500m (about US$1.38 million).

Onyema said, “The segmentation of the boards also provides alternative options for interested investors to participate in each company’s growth journey.”

He further noted that services such as pre-listing diagnostics and institutional services such as audit, financial advisory, legal advisory, corporate strategic advisory, investor relations, analyst coverage, corporate access and corporate governance will be provided.

 He also said that the Exchange will also provide tailored training on its learning and ‘development platform ‘X-Academy’ for capacity development and to promote increased corporate governance for boards and employees of companies on the growth board.

The Head, Listings Business Division, NSE, Mr Olumide Bolumole, said growth board companies would enjoy reduced the NSE fee structure, reduced pre- and post-listing obligations and increased turnaround time for approvals and time to market.

The Nigerian Stock Exchange was established in 1961 and is a multi-asset Exchange with 166 equities, 154 bonds, 9 Exchange Traded Funds (ETFs), and 53 memorandum listings with a total market capitalization of over ₦28 trillion (about US$77 billion) as at January 9, 2019.

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