The decision of the House of Representatives to demutualise the Nigerian Stock Exchange was based on the need to make it more attractive to investors by opening up the capital market in line with global best practices, the Speaker, Hon. Yakubu Dogara, has said.
Dogara, in a statement by his Special Adviser on Media & Public Affairs, Mr. Turaki Hassan yesterday, said the action would make more multinational corporations to get their companies listed, thereby contributing to the development of the economy.
By implication, the demutualisation of the NSE would bring the ordinary Nigerian closer to benefiting from the nation’s commonwealth, he added.
Sequel to the adoption of the recommendations of a report by Hon. Yusuf Ayo Tajudeen – headed Committee on Capital Market and Institutions on a Bill for an Act to facilitate the development of Nigeria’s Capital Market by enabling the conversion and re-registration of the Nigerian Stock Exchange from a company limited by guarantee to a public company limited by shares; and for related matters, last week, the Green Chamber demutualised the Nigeria Securities Exchange.
Dogara noted that the changes made by the House, when concurred to by the Senate is signed into law by the President, it will result in a flexible governance structure in the capital market as well as stimulate the involvement of investors in governance, thereby making it easy to take decisive action in response to changes in the business environment where and when necessary.
Increased access to resources for capital investment raised by way of equity offerings or private investment will also be assured, he said.
Recall that in June 2016, Dogara visited the stock exchange in Lagos where he sounded the closing gong and promised to use legislative tools to reposition the capital market for maximum performance.
At the time, the Speaker said it was unacceptable for a large chunk of the nation’s resources or capital to be heavily concentrated in the hands of few chief executive officers.
This, he added, would pose serious threat to the sustenance and survival of democracy as the inequality gap would further widen and the middle class eliminated thereby plunging more people into abject poverty.
Conversely, deepening of Nigeria’s capital market will enhance wealth redistribution and deliberately allow it to trickle down to the ordinary people as against the practice where multinational corporations repatriate their profits 100 percent to their own countries without investing a dime back to the Nigerian economy, he said.
