‘NDR will aid investors’ accessibility to offshore instruments’
The Nigerian Exchange Limited (NGX) has announced that the proposed launch of non-depository receipts (NDR) will give investors access to financial instruments listed on offshore exchanges and deepen the market.
The NGX is working with the Ghana Stock Exchange (GSE) to improve on secondary listings that will develop private market utilisation of technology.
Divisional Head, Capital Markets, NGX, Jude Chiemeka, stated this while addressing participants at the 2023 Nigeria Risk Summit in Lagos.
Speaking on the theme: ‘Investor sentiment on Nigeria: success and challenges’, Chiemeka said the initiative would enable asset managers to sponsor the instrument offshore, convert the receipts and sell-off in the local market.
He added: “In the end, we are not only enabling exposure to foreign exchange, but we are also preparing a marketplace with a broader spectrum of participants.”
According to him, the NGX had in 2022 received approval from the Securities and Exchange Commission (SEC) to release its technology board listing rules to encourage investments in indigenous technologically-inclined companies within Nigeria and across Africa by providing greater visibility to these companies.
He also stated that the partnership with the International Finance Corporation (IFC) and Islamic Development Bank to train capital market participants on the impact of sustainable and Islamic finance respectively was in recognition of the importance of investor education to a healthy market
He added that the Exchange had partnered with the London Stock Exchange (LSE) and the Luxembourg Stock Exchange (LuSE) to offer dual listings to corporates, increase the size of the market where investors could invest in a broader-based market and aid the cross-issuance, listing of green bonds.