The Nigerian Stock Exchange has appointed South African bank FirstRand and local investment firm Chapel Hill Denham to advise it on a possible share flotation, it said on Tuesday.
The bourse, which has the second biggest weighting on the MSCI frontier market index after Kuwait, is a major entry point to invest in Africa.
The stock exchange said in November that it was considering an initial public offering to attract more foreign investors.
As a first step, the stock market plans to change its ownership structure from a mutual company of 240 brokers to add new shareholders.
This year, shares in the oil producing-nation have lost around 12.8 percent to add to the 16 percent loss last year.
Foreign funds sold shares after the naira lost value due to the slump in the oil price.
The exchange, the second-largest African bourse by market value after South Africa, plans to allow the trading of derivatives such as futures and options in interest rates, currencies and equity indexes by next year, it has said.
The NSE employed a very rigorous and extensive selection process, commencing with a Request for Proposal (RFP) process which began on March 11, 2014 inviting qualified financial consortia to submit expressions of interest (EOI).
As part of the EOI, potential financial advisors (FAs) were required to express their interests as a consortium of one international and one Nigerian investment bank, where at least one party of the consortium had participated in the demutualization of a securities exchange as lead adviser.
Commenting on the appointment, the Chief Executive Officer of NSE, Oscar N. Onyema, OON, said “This appointment affirms our commitment to achieving the demutualisation of the NSE in a methodical and transparent fashion. This step is pivotal to a professional and successful conversion of the Exchange from a member-owned mutual organization to shareholder-owned public limited liability company that aligns with global best practices”.
Commenting on the appointment, the CEO of RMB Nigeria and Regional Head for West Africa, Michael Larbie, said RMB is delighted to be assisting the NSE with the demutualisation. “We believe a demutualisation will further strengthen the NSE’s position as a leading exchange in Africa. We intend to leverage our deep advisory and structuring expertise and in-depth understanding of the Global Market Structure and Broker Dealer sector to support the process.”
Commenting on the appointment, CEO of Chapel Hill Denham said, “Chapel Hill Denham is honoured to have been selected by the Nigerian Stock Exchange on this most important engagement. We look forward to working with the exchange and all its stakeholders in delivering a successful outcome.”
