- Title: NIGERIA-STOCK EXCHANGE Top investment banks seek to join Nigeria bourse: CEO
- Date: 11th April 2013
- Summary: Africa's second largest economy and top oil producer is growing in popularity as an investment destination, attracting leading international banks waiting to join its stock exchange market. Nigeria's bourse rose 35 percent in 2012, making it the second best performer in Africa and one of the best in the world. LAGOS, NIGERIA (APRIL 10, 2013) (REUTERS - ACCESS ALL) 1. VARIOUS OF EXTERIOR OF NIGERIA STOCK EXCHANGE BUILDING/ STOCK DETAILS SCROLLING 2. VARIOUS OF TRADING FLOOR 3. SCREEN SHOWING STOCK EXCHANGE SHARES 4. VARIOUS OF NIGERIA STOCK EXCHANGE CEO, OSCAR ONYEMA WORKING ON COMPUTER 5. COMPUTER SCREEN 6. (SOUNDBITE) (English) NIGERIA STOCK EXCHANGE CEO, OSCAR ONYEMA, SAYING: "The big investment banks, you know the bracket firms are you know the top ten in the world so really for them, becoming a member and participating directly in the market place is just a question of facilitating their distribution network and I think that given the increases in average daily volume, the improvement in regulation, the improvement in transparency and the automation that we are introducing, they are finding out that its an attractive proposition for them and so a number of them have come here and I believe one or two have formally applied." 7. VARIOUS OF TRADERS 8. STOCK EXCHANGE TICKER SCREEN 9. (SOUNDBITE) (English) OSCAR ONYEMA, CHIEF EXECUTIVE OFFICER, BOURSE, SAYING: "I don't believe confidence has been fully returned, I believe that a great deal of confidence is back in the system and I can point to the fact that the retail investors and the local investors are coming back into the market in droves especially the institutional investors, now the reason why I said I don't believe confidence is fully back is that the retail investors are not fully back in yet. 10. NIGERIAN FLAG/PAPER HOLDER ON DESK 11. (SOUNDBITE) (English) OSCAR ONYEMA, CHIEF EXECUTIVE OFFICER, BOURSE, SAYING: "Average daily value traded last year was 17 million dollars, yet to date, this year, its 26 million dollars, so it's a significant increase, certainly not were it was in 2008 when we were doing over 100 million dollars on a daily basis, but we can see the increase and you know, gradually we intend to get to that level and surpass it as we introduce all the changes that I have told you about, and as they begin to mature and actually generate results." 12. MORE OF TRADING FLOOR
- Embargoed: 26th April 2013 13:00
- Keywords:
- Location: Nigeria
- Country: Nigeria
- Topics: General
- Reuters ID: LVAF3Y9EOA17ZETRRP9DHE6N8HP
- Story Text: Nigeria's stock exchange is reviewing applications from some leading global investment banks to join its trading floor, as reforms aimed at improving liquidity and transparency bear fruit, its CEO said on Wednesday (April 10)
Bourse CEO Oscar Onyema told the Reuters Africa Investment Summit in Lagos that a return of confidence in the market from domestic investors burned by a 2009 financial crisis had reversed the trend of foreigners holding most Nigerian shares.
Domestic investors now accounted for 59 percent of holdings, on the NSE, against 45 percent at the end of last year, he said.
"The big investment banks, you know the bracket firms are you know the top ten in the world so really for them, becoming a member and participating directly in the market place is just a question of facilitating their distribution network and I think that given the increases in average daily volume, the improvement in regulation, the improvement in transparency and the automation that we are introducing, they are finding out that its an attractive proposition for them and so a number of them have come here and I believe one or two have formally applied," Onyema said.
Citibank and JP Morgan both have a presence in Nigeria, but do not trade shares on the NSE, which is currently dominated largely by small local stock brokers.
Rencap and Standard Bank both already have traders operating on the bourse floor.
Before the stock market bubble burst in 2008, wiping nearly two thirds off its value in a year, domestic investors owned 85 percent of shares, with foreigners owning the rest.
That ratio had fallen to 43 percent domestic against 67 percent foreign by the end of 2011.
"I don't believe confidence has been fully returned, I believe that a great deal of confidence is back in the system and I can point to the fact that the retail investors and the local investors are coming back into the market in droves especially the institutional investors, now the reason why I said I don't believe confidence is fully back is that the retail investors are not fully back in yet," he said.
Africa's second biggest bourse has made a series of sweeping reforms since it emerged from the 2009 financial crisis that nearly saw nine banks go under.
These have included tighter regulations, introducing a new trading technology platform, bringing in market makers and allowing short selling.
The new platform using Nasdaq technology would be ready to go online by the third quarter of this year, he said.
The bourse last year introduced its first exchange traded fund (ETF) and its first retail bond index, and Onyema said it aimed to enable depository receipts to be listed in Nigeria this year, and to start trading derivative products in 2014.
"Average daily value traded last year was 17 million dollars, yet to date, this year, its 26 million dollars, so it's a significant increase, certainly not where it was in 2008 when we were doing over 100 million dollars on a daily basis, but we can see the increase and you know, gradually we intend to get to that level and surpass it as we introduce all the changes that I have told you about, and as they begin to mature and actually generate results," he said.
Several IPOs and an equity ETF were in the pipeline, he said, but he declined to give details.
The bourse remains a long way off from its target of $1 trillion dollar valuation by 2016. The capitalisation of the bourse is currently just over $100 billion.
Onyema urged the government to give tax breaks to firms that list on the stock exchange because currently a lot of companies were electing to stay private so that they do not have to disclose their profits and pay high rates of corporate tax.
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