The Group Chief Executive Officer, Nigeria Exchange Group Plc, Mr Oscar Onyema, has said demutualisation will reduce conflict of interests in the shareholder-owned entity and support agile decision-making.
Onyema said this at the Association of Capital Market Academics of Nigeria (ACMAN) webinar on Friday where he featured as the guest speaker.
He added that demutalisation would improve governance, bring about greater management performance, transparency and accountability.
He said that the demutualisation of the Nigerian Exchange converted its legal structure from a company limited by guarantee to a public company, with an expectation to make and distribute profit to the shareholders.
According to Onyema, the demutualisation is in line with the growing trend in the Securities industry, especially among members of the World Federation of Exchanges.
Speaking on the topic: “The Promise of the Nigerian Stock Exchange Demutualisation,” Onyema highlighted some direct benefits of demutalisation.
He listed the benefits as wider access to capital, flexibility to explore new growth opportunities, enhanced competitiveness and greater ability to mobilise funds.
Onyema added that demutualisation would enhance competitiveness, greater ability to mobilise funds to upgrade systems, attract high-calibre staff and expand to new markets, among others.
Speaking on the advantages of demutualisation for the Nigerian capital market, he said it would help diversify systemic risk in the financial market.
According to him, it will act as a positive force in propelling the Nigeria economy by virtue of its potential to overcome liquidity challenges by African exchanges.
“It allows the demutualised exchange to create wealth for the general populance via listing on the capital market,” Onyema said.
Prof Seth Akutson, the Vice-Chancellor of Greenfield University, said the most important aspects to consider were the reform measures put in place to ease transmission process during this era.
Akutson noted that the impact of demutualisation on the Gross Domestic Product of the country should be properly harnessed, while unveiling new trading techniques to be applied during the process.
Prof Mohammed Mainoma, a former Vice-Chancellor of Nasarawa State University, said that demutualisation had opened greater growth opportunities.
Mainoma said the initiative enhanced capital inflow, corporate governance structure, computerisation and technology investment, among others.
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He said demutualisation would make the exchange less susceptible to vested members, bring market discipline and better decision-making to the capital market.
The News Agency of Nigeria (NAN) reports that academics from tertiary institutions across the country recounted the benefits of demutualisation as well as expressing the fears as regards the smooth operations of the NGX post-demutualisation.
The President, Association of Capital Markets Academics of Nigeria (ACMAN), Prof. Uche Uwaleke, moderated the lecture.
NAN
