October 27, 2016/NSE
An Opening Remark by Oscar Onyema, CEO NSE at the Charted Institute of Stockbrokers (CIS) Nigeria: 20th Annual Stockbrokers Conference
I am very pleased to be here today and have the honourof making a few remarks at this important forum alongsidedistinguished leaders of our great country. This event brings together so many representatives from the government and capital market community with whom the Nigerian Stock Exchange (NSE or The Exchange) shares a common visionofadvancing our nation through the operation of a sustainable capital market.I must congratulate the President of the Chartered Institute of Stockbrokers (CIS), Mr. Oluwaseyi Abe and his entire team onhosting this twentieth episodeof the annual CIS conference. Your commitment to upholding professionalism and integrity in the securities and investment industryhas made an indelible mark onthe capital market and the nation at large.
The importance of a robust and sustainable domestic capital market cannot be overstated, and access to long-term financeiscritical to our economic recovery and implementation ofthe Sustainable Development Goals (SDG) and other national and global agendas. This morning’s theme – Building New Pillars, Creating New Values for Sustainable Developmentsits at the very heart of the NSE.At the intersection between issuers, investors, and regulators – The Exchange is strategically positioned to influence the adoption of globally recognized sustainability standards by Nigerian businesses. These standards and principles, to which the Exchange itself adheres, help to shape investment decision-making, and have become increasingly important to attracting the global flows that our market needs to support a more diverse and competitive Nigerian economy.
A key pillar of the NSE’s overall sustainability strategy is the ‘Marketplace’,and our fundamental principle in this regard is the development ofa sustainable capital market that finances growth that maximizes the long-term value of investment portfolios. Towards this commitment, the Exchange is focused on i) continuously enhancing regulatory oversight,ii) initiating new collaborations for policy formulation and promotionof Environmental, Social and Governance (ESG)standards, and iii) promoting reporting practices asan integral element of a well-functioning market and economy.
In 2014, The Exchange in partnership with the Convention on Business Integrity (CBi) introduced the Corporate Governance Rating System (CGRS) for NSE-listed companies. Corporate governance is necessary and useful for all types and sizes of companies because it provides the ‘checks and balances’ that create sustainable businesses, irrespective of the sector. The CGRS evaluates companies based on the quality of their corporate integrity; compliance with governance standards; understanding of fiduciary responsibilities by directors and corporate reputation. At The Exchange, all members of the NSE National Council, myself included, have successfully gone through the CGRS certification program,
while 66% of all companies listed on the NSE are currently undergoing an assessment process and are at various stages of completion.
To further elevate and showcase high-performing Nigerian companies, we launched a Premium Board for large companies with the highest standards of corporate governance in 2015. Despite current bearish trends, the NSE’s Premium Board index has grown 6.9% year-to-date, compared to the NSE’s All-Share Index (ASI) which is down 5.3%. This reflects the appeal of this Board to investors, and affirms that strong, transparent and sustainable listed companies are key to developing a resilient market.
Our strides in imbibing and promoting sustainability practices are significant, but there is a lot more to do to increase the competitiveness and sustainability of the Nigerian capital market. This requires a concerted effort of the entire eco system from the capital market community to the regulators, legislators and policymakers. On our part we continue to make ourselves available to support Nigeria’s newly-privatizedgovernment entitiesas they seek to access capital required for critical business infrastructure and service upgrades via the equity and debt markets. We are also committed to financing low-cost, eco-friendly project through green bonds and infrastructure bonds amongst many other innovative products that supportNigeria’s socio-economic development.
There is no question that these are challenging times for our nation, but it is also an opportune time to take a step back and re-strategize on how best to safeguard the future of our economy, and imbibe a culture of sustainability in all of our developmental planning. It is our expectation that our national commitment to the SDGs will reinforce this vigor and encourage the public sector to partner with the private sector in providing energy, housing and transport services that meet economic, social and environmental demands. Indeed, the merger of the ministries of power, housing and works offers the federal government with an opportunity to push a broader sustainability agenda. We are already progressing our collaboration with the Ministryof Environment to bring the first Green bond to the Nigerian market first Quartey 2017.
The NSE remains committed to joint engagements with the government, capital market stakeholders and other private sector players, to explore synergies that can emerge from complementary actions in both policy development and implementation. I have no doubt that the discussions here today will provide us with a greater perspective and lithany of ideas that we can all bring to bear in fulfilling our individual roles towards Nigeria’s journey to sustainable development.
Oscar N. Onyema, OON
Chief Executive Officer