The Nigerian Stock Exchange (NSE) has launched a new listing platform - the Premium Board and the associated Premium Board Index, in its bid to promote Africa’s biggest companies, as well as influencing the economic growth and development of Africa's biggest economy.
In a statement by the exchange, the Board will feature companies that meet the Exchange’s most stringent listing criteria of capitalization, governance and liquidity.
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| Nigerian Stock Exchange |
"It aims to provide a platform for greater global visibility for eligible African corporates to make it easier for them to attract global capital flows and reduce the cost of funding," the NSE said.
The Premium Board Index, according to the NSE, is an equity index designed to provide 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 are tradable on the bourse.
Commenting on the new listing Board, Oscar Onyema, NSE Chief Executive Officer said, “The Exchange is a member of the United Nation’s 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 centre 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 boss said.
The Premium Board Index would serve as a benchmark for investors looking to track the performance of large firms with excellent corporate governance and sustainable business models. Typically, similar indices outperform their market wide index by double digits. The NSE Premium Board Index had a four year average return of 17.65% versus the All Share Index return of 11.31% over the same period.
Also speaking on this development, the Executive Director, Business Development, NSE, Mr. 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, FBN Holdings, and Zenith Bank with market capitalisation of N2.87 trillion, N277.70 billion and N587.43 billion respectively. They all passed the CGRS before applying for the Premium Board.
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