Nigerian Stock Exchange (NSE), the nation’s bourse, is moved to target the small and medium enterprises (SMEs) for listing, in a bid to bring access to fund to the sub-sector following last week’s official launch of Alternative Securities Market (ASeM) for emerging companies with high potential for growth in Nigeria. In Nigeria today, the growth of SMEs is being hampered largely by lack of and/or high cost of funding as well as multiple taxation, including various government related levies.
The ASeM will be a specialised board on the Nigerian bourse where small-to-mid-sized companies can access the capital market under less stringent rules and requirements to raise long-term, low-cost capital.
The NSE had set a $1 trillion market capitalisation target for itself by 2016, and the ASeM launch is part of the targeted business development initiatives built around achieving the Herculean task.
‘‘What the Stock Exchange is doing is to bring access to fund to investors and SMEs. Three things are keys to this. Entrepreneurship, growth, and sustainability,’’ said Aliko Dangote, president, NSE, who was represented by Aigboje Aig-Imoukhuede, CEO, Access Bank, and a member of the NSE council.
According to Dangote, it is important that we begin to unlock the opportunities in the SMEs to make them work for both Nigeria and Nigerians.
In anticipation of more companies’ listings on the ASeM board, there are currently 11 pioneer members making up the ASeM index namely: Adswitch plc, Afrik Pharmaceutical plc, Animo International plc, Capital Oil plc, Juli plc, McNicholas Consolidated plc, Rak Unity Petroleum plc, Rokana Industries plc, Smart Products Nigeria plc, Union Venture & Petroleum plc, and West Africa Aluminium Products plc.
Oscar Onyema, CEO, NSE, however noted that the NSE had in 2000 attempted to create board for private placement called Private Exchange and Alternative (PRIMPEX) Market, but the idea was dropped by the new management in 2011.
He said after diagnostics, the NSE intervened by the introduction of Designated Advisors (DAs) to assist ASeM companies meet post-listing obligation. Benefits of listing on ASeM include among others, access to long-term capital – platform for facilitating long-term sustainability of the company, reduction of financial burden and risk spreading among shareholders, access to investors focused on high growth potential SMEs in emerging markets, and liquidity for shareholders and transparent price discovery mechanism.
The Exchange had selected14 companies as DAs to provide professional advisory services to the mid-size companies before and after their listing.