Three new firms meet NSE’s listing requirements
To migrate into premium board
At least three companies from financial, oil, gas and industrial good sectors, currently quoted on the main board of the exchange are set to be migrated to the premium board.
A source at the exchange who disclosed this to The Guardian at the weekend, declined to mention the names of the companies on the ground that the process of the migration is yet to be concluded.
The source, explained that the companies are from the financial services, oil & gas and industrial goods sectors, adding that the process would be completed in no distant time subject to final confirmation from Convention on Business Integrity (CBi) and the Exchange.
Premium Board, introduced a year ago, was developed for feature companies that meet the Nigerian Stock Exchange’s (NSE) most stringent listing criteria of capitalisation, governance and liquidity.
“The Premium Board is well positioned to enshrine greater corporate governance in the DNA of listed issuers in Nigeria and across Africa. Listed issuers on the Premium Board will enjoy the highest levels of visibility and appeal to investors looking for large issuers with the highest standards of corporate governance and disclosures,” he noted.
According to the source, since the premium board launch, the market capitalisation has increased by N264.5 billion, representing eight per cent appreciation in market cap. The NSE Premium Board Index had a four-year average return of 17.65 per cent versus the All Share Index (ASI) return of 11.31 percent over the same period and has outperformed the ASI by over 15 per cent since its launch August, 2015.
The NSE Premium Board and the associated Premium Board Index were launched on Tuesday, August 25, 2015. The Board features companies that meet the Exchange’s most stringent listing criteria of capitalisation, governance and liquidity.
It provides a platform for increased global visibility for eligible African corporates to make it easier for them to attract global capital flows and reduce the cost of funding. The Board also provides greater investment returns for the discerning investors and portfolio managers.
On the other hand, the premium board index is an equity index designed to provide a benchmark for investors looking to track the performance of large issuers with excellent corporate governance and sustainable business models.
It will also provides a basis for developing products (such as ETFs and equity index derivatives) that are tradeable on the bourse.
The pioneer issuers that are listed on the Premium Board are Dangote Cement Plc, FBN Holdings Plc, and Zenith International Bank Plc with market capitalisation of N3.12 trillion, N112.35 billion and N495.12 billion respectively as at August 22, 2016.
To achieve a listing on the Premium Board, the issuer must satisfy the National Council of the Exchange by making a written application to the Exchange requesting to list on the Premium Board, must undertake the Corporate Governance Rating System (CGRS) evaluation and achieve a minimum rating of 70 per cent.
Also, the issuer must achieve a market capitalization (where the company is already listed on a listing Board of the Exchange) or have a valuation (where it is a fresh listing) that is equal to or in excess of N200 billion on the date the Exchange receives the issuer’s application to list on the Premium Board.
Furthermore, issuers are expected to satisfy either of the following: A minimum free float requirement of 20 per cent of its issued share capital; or the value of its free float is equal to or above N40 billion on the date the Exchange receives the issuer’s application to list; and must execute the General Undertaking for listing on the Premium board.