Market Witnesses Another Landmark as NSE Launches Premium Board –A Bovespa Concept–Aug’15 SSS Report

Proshare

Tuesday, September 01, 2015 04.00PM / sss@proshareng.com


Market maintained the negative sentiment recorded in the previous month in August 2015 as the key benchmark indicator, NSE ASI closed the month red with -1.64% losses as against -9.79% recorded in July while market YTD performance also remained in the red zone with -14.35% losses.

After much waiting, The Nigerian Stock Exchange launched the much talked about Premium Board on 25th August, 2015 barely a month after the milestone launch of a new e-dividend Management System by the Securities & Exchange Commission.

The premium board is similar to the idea and strategy launched in 2001 by the Sao Paulo Stock Exchange (Bovespa) which was the first Exchange to launch a premium listing. The Bovespa segmented its premium listing into three (3) away from the traditional listing system which had no disclosure and corporate governance practices requirements other than those in corporate laws.

The Level 1 (L1) of the premium listing requires most additional disclosure; Level 2 (L2) requires everything in L1 and an assortment of corporate governance practices while the third segment, New Market, equals L2 with additional requirements prohibiting companies from using non-voting shares in equity capital. Thus, a companies’ decision to migrate to any of Bovespa’s premium segments suggests the firms’ willingness to embrace higher disclosure and corporate governance standards than required under corporate laws applicable in the country.

Other Exchanges that have at one time launched premium listings are Frankfurt Stock Exchange, Milan Stock Exchange and The London Stock Exchange in April 2010.

Along with the launch of the NSE premium board which is referred to as the platform for true African Champions, the NSE also launched the premium board index which is expected to transact the performance of stocks on the premium board.

At inception, eight (8) quoted firms were said to have applied for migration to the new board while three (3) eventually scaled through and the three are Dangote Cement Plc, Zenith Bank International Plc and FBN Holdings Plc.

As regulators continue with their market development functions, primary market activities in the month remains relatively non-active as market witnessed no IPOs or Rights Issues, while UAC of Nigeria Plc notified the market of its intention to raise capital with its board also considering a Rights Issue. Further communication and update is still being expected on this development.

In this edition of The Nigerian Capital Market Service Report, we continued the updates of our various data section with latest updates required in the report as well the update a new section such as Economic indicators and upcoming events in the market and the economy.

This is to ensure that we deliver a comprehensive capital market service report that helps cover and track innovations, developments as well as service issues in the market effectively.

In all, the August 2015 SSS Quality Report is a snapshot and aide memoire of these developments as we keep tracking milestones that the investing public should be aware of.

Do feel free to share your opinions/observations and feedback with us vide sss@proshareng.com

Thank you.

For: Analyst Editorial Board

Reshu BAGGA

CEO, The Analyst


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