Nigerian Stock Exchange launches Premium Board

The Nigerian Stock Exchange (NSE) announced last week Tuesday the launch of a new equity listing platform, the Premium Board, and the associated Premium Board Index.

The Board will feature companies that meet the Exchange’s most stringent listing criteria of capitalization, governance and liquidity. The aim of the Board is to provide a platform for greater global visibility for eligible African corporates. Such a platform would make it easier for companies to attract global capital flows and reduce the cost of funding.

The related Premium Board Index is an equity index that serves as a benchmark to capture the performance of companies listed on the Premium Board. The index will also provide a basis for developing products (such as ETFs and equity index derivatives) that will be tradable on the Nigerian Stock Exchange.

Commenting on the new equity listing Board, the Chief Executive Officer of the Nigerian Stock Exchange, Oscar Onyema, said “The Exchange is a member of the United Nations Sustainable Stock Exchange Initiative, which is designed to encourage stock exchanges to influence their ecosystem to adopt sustainable ways of doing business around Environmental, Social, and Governance dimensions. The Premium Board is one result of our commitment to place corporate governance front and center as a way to improve the climate for doing business in Africa. We expect that companies on the Board will enjoy the highest levels of visibility and appeal to investors looking for large companies with the highest standards of corporate governance.”

The NSE Premium Board Index has experienced a four year average return of 17.65% versus the All Share Index return of 11.31% over the same period.

Also commenting on the launch of the Board, the NSE’s Executive Director for Business Development, Haruna Jalo-Waziri, stated that “the launch of Premium Board and the Premium Board Index is in line with the NSE’s commitment to promoting and continuously developing a more transparent, liquid, accessible market. The Premium Board is for issuers with minimum market capitalization of N200bn and highest corporate governance standards. Companies aspiring to be listed on the Premium Board must achieve a minimum score of 70% on the stringent Corporate Governance Rating System (CGRS). In addition, they are required to maintain a minimum free float of 20% of their issued share capital or a free float value equal to or above N40 billion”.

The companies that have qualified for the Premium Board are Dangote Cement Plc, Zenith International Bank Plc and FBN Holdings Plc with market capitalizations of N2.87 trillion, N587.43 billion and N277.70 billion respectively. These three companies all passed the CGRS before applying for the Premium Board.

Source: The Nigerian Stock Exchange (NSE) – Live