January 29, 2020
Ottoabasi Abasiekong for WebTV
2 High-Growth Companies are at the documentation stage in preparation for their eventual listing on the Nigeria Stock Exchange (NSE) Growth Board.
The Divisional Head, Listings Business of the NSE, Mr. Olumide Bolumole, revealed this at the official launching of the Board at the Exchange office in Marina, Lagos.
Mr. Bolumole said the Growth Board was an improvement on the Alternative Securities Exchange Market, ASEM which will be phased out by the Exchange.
According to him, the consistent negative performance of the ASEM index and lack of traction of listings underpinned the need for a revamped Board.
Giving his opening remarks, the CEO of the NSE, Mr. Oscar .N. Onyema, OON, said the Growth Board was a platform for high growth companies to leverage and raise long-term capital.
According to him, this was part of the efforts to support the development of Small and Medium-scale Enterprises (SMEs) that contribute 48.7% of the National Gross Domestic Product (GDP).
Mr. Onyema acknowledged the fact that despite their contribution, SMEs face the challenge of declining productivity caused by issues like epileptic power supply, lack of trade facilitation, the multiplicity of taxes, limited availability of required talent and issues around corporate governance.
Through the Growth Board, Onyema noted that High-Growth Companies would have the opportunity to access the following services;
- Pre-listing diagnostics
- Financial advisory
- Legal advisory
- Corporate strategy advisory
- Investor relations
- Analyst coverage
- Corporate governance
The NSE CEO wooed the 97 Nigerian Firms that were listed among the “2019 Companies to Inspire Africa Report” published by the London Stock Exchange Group (LESG) in partnership with PwC to come onboard and join the Growth Board.
He suggested that business partners and value-added service providers, in partnership with the NSE, develop the initiative.
Mr. Olanrewaju Odufuwa, Team Lead, Growth Board(Primary Markets) of the NSE, described the initiative as one designed to deepen capital market penetration for SMEs.
Odufuwa said the board had value-added service providers, strategic partners and an expanded list of designated advisers differentiating it from ASEM.
He listed some of the benefits of the Growth Board to include;
- Providing access to SMEs to raise cheaper and longer-term capital
- Providing Global Visibility for the companies listed on the Board
- Ensuring that there is an exit option for core investors who seek to diversify their portfolio
- Enabling investors to fund High Growth companies
In terms of the listing provisions, the entry point for Small and Medium Enterprises onto the Board ranges from N50m to N500m with a public float of 10% (minimum of 25 shareholders), while the standard level which is for medium to established businesses ranges from N500m to N4bn (minimum of 51 shareholders).
The NSE will target tech firms that have shown high growth prospects alongside other SMEs from other critical sectors of the economy.