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Demutualisation will unlock more capital, spur economic growth

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Concordant tunes have trailed the ongoing demutualisation of the Nigerian Stock Exchange (NSE), especially the 78:22 equity distribution ratios, even as stakeholders affirmed that the exercise would unlock more capital for wealth creation and ultimately stimulate economic growth.
 
NSE has announced that it would convene a mandatory Court-Ordered Meeting (COM) of members to pass requisite resolutions for the demutualisation of the Exchange on March 3.
     
Speaking on the development, the Managing Director, APT Securities and Funds Limited, Garba Kurfi, noted that demutualisation would help reactivate idle capital in the market, thereby boosting economic activities.
He said: “It is a good thing and all of us are going to be happy at the end of the day, because it is going to unlock more capital for the market. For instance, if I place shares as collateral, I can trade and make money from them. We are pleased this is coming after so much delay; this will change the economy’s perspective as well.

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“My only worry is that we are slow starters, and we need our regulators to rise up to their responsibility. The issue of demutualisation started many years ago, but we are still talking about it in 2020.
   
“It is already history in Nairobi, Kenya; however, it is better late than never. If NNPC and LNG eventually get listed on the Exchange, it will make more dead capital alive.”
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Also speaking, the National Coordinator, Progressive Shareholders Association, Boniface Okezie, expressed support for the sharing ratio, as long the NSE also considers the minority and ordinary Nigerians with the remaining 22 per cent including shareholders.
   
“They have come out with a perfect arrangement. With 75 per cent given to stockbrokers, it is okay. They are the owners of the Exchange no doubts about that. As I said earlier, every local government area in the country must participate in the sharing that is what I call merry-go-round; nobody should be left out, everybody must be represented on board, that is the way it should go.

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“I call for total transparency in this dealing, since the EGM is slated for 3rd March. They should hasten the processes of listing quickly, and constitute the board members fully comprising eminent stockbrokers across the country, including some notable active shareholders, and bankers on its board.”
      
The President, New Dimension shareholders, Patrick Ajudua, while supporting the sharing ratio, however said: “As investors, we would have desired a better allocation to ordinary members, but we have confidence in the dealing members to faithfully and adequately protect the market and interest of ordinary investors to a large extent.”

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