Nigeria Stock Exchange (NSE) Managing Director/Chief Executive, Oscar Onyema, disclosed that the exchange has developed what he described as Consequence Management Process for rule violation following the launch of the Alternative Security Market (AseM) for emerging businesses last week.
NSE stated that the measures were intended to guard against infractions by the market players along with the introduction of ASeM Index to track performance of companies listed on the board.
It is also introducing alternative capital raising instruments, other than pure vanilla equity for ASeM companies to achieve optimal capital structure as well as collaborating with organisations like the Small and Medium Enterprises (SMEDAN, etc) towards developmental programmes for ASeM companies.
The NSE will also be involved in the management of the on-going MSME Policy Formulation to address capital market provision for SMEs.
Current Members of the NSE AseM Index include firms like Adswitch Plc, Afrik Pharmaceuticals Plc, Anino International Plc, Capital Oil Plc, Juli Plc, McNichols Consolidated Plc, Rak Unity Petroleum, Company Plc, Rokana Industries Plc, Smart Products Nigeria Plc, Union Venture & Petroleum Plc and West Africa Aluminium Products Plc.
Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu explained that the launch of Alternative Securities Market (ASeM) by the Nigerian Stock Exchange will among other benefits avail the small and medium scale companies a window to access long-term funds at relatively lower cost.
He said, “With market liquidity ASeM will also help such companies attract investment from a broader shareholder base, which will in turn help strengthen corporate governance.
“Alternative Securities Market appeal to investors including those already active in the main board is the growth prospects of companies that will be listed in the ASeM board. Given that ASeM is primarily for Small and mid-sized companies with strong growth prospect, investor in equities quoted on the ASeM board will enjoy the benefit of capital appreciation as the investee companies grow and eventually mature to be listed in the main board. In effect, investment in the equities of companies listed on ASeM can be regarded as investment in ‘growth stocks.”
On measures to further assist emerging business, Chukwu said, “Aside from the less strigent listing and post listing requirements already granted to companies willing to list on ASeM, the NSE should consider granting lower transaction costs on trades executive on the ASeM Board.
The NSE can also explore the possibility of getting the Federal Ministry of Finance to grant 5 years tax holiday on dividend paid by companies quoted on the ASeM.This will encourage both the Small & Medium Scale companies and their shareholders to seek for listing on ASeM.”
The designated advisers include the ARM Securities Limited, BGL Securities Limited, Capital Asset Limited, Cardinal Stone Securities Limited, EDC Securities Limited, Fidelity Securities Limited, and FSDH Securities Limited. Others were Investment One Stockbrokers International, Magnartis Finance & Investment Limited, Marina Securities Stockbroking Services, Morgan Capital Securities Limited, Partnership Investment Company Limited, Primera Africa Securities Limited and UBA Stockbrokers Limited.
“This is a good development,” Chief Executive, Trust Yield Securities Limited Ola Yussuff said.“It is a good development, not only for investors, but also the issuers. Everybody should be interested in it,” he added.
According to him, there are some small and medium scale businesses that are being run well, and people would want to invest in, should they have the platform to do so.
“They may not be so big, but they are being run well. People are using their products and would be willing to invest in them. On the other hand, these businesses can also use this opportunity to raise new capital. With such, they can expand their businesses. At the end, both sides should be happy,” he said.
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