NASD repositions to attract more global investors’ participation

NASD OTC Plc, a platform that trades on all securities of unquoted public companies in Nigeria, has repositioned its system to attract active investors’ participation across the globe and maintain a more efficient market in Africa.

This, according to the company, was part of its action plans to align its system with consensus reached at the 2015 African Securities Exchange Association (ASEA) conference.

Outlining its strategic plans for 2016 during an interactive forum with Chief Executive Officers of participating stockbroking houses in Lagos at the weekend, the Managing Director, NASD OTC, PLC, Bola Ajomale, said the exchange would launch link notes, market making programmes and Private Equity fund in the second quarter of the year to take advantage of funds that are seeking investment destination.

According to him, the Exchange would tighten price structure within the year and is targeting two to three price bands for an effective price discovery.

“Regarding funds and investments wanting to come into Africa, we think that the way it is going to come in is in private equity and the funds that want to come in are looking past the macro. They are looking for multiple returns, not percentage returns.

“So, as a result, ahead of the ASEA conference which happened few months ago, we have started work on private equity side; we have committees, they are active and working. We have engaged SEC in the process and we that in few months time we are going to be launching the private equity fund,” he said.

He pointed out that the exchange has identified about 100 companies that will be prospected for listing on its platform. He added that NASD OTC is in the process of joining the ASEA and hopes to complete the process and become a full member in the second quarter.

On the performance of the exchange for the first quarter of the year, Ajomale said that 16.3 billion shares certificates have been dematerialized, while 144 million units valued at N959 million were traded.

Ajomale noted that the market slowed down after ‘a big jump in June 2015’, attributing the decline in activities to the Securities Exchange Commission (SEC)’s pronouncement that only companies quoted on the Nigerian Stock Exchange (NSE) are under its purview.

“We hope that this number will jump significantly in the next quarter, because we are hoping that SEC will correct the statement that only stocks on NSE are under its purview.”

He said the exchange would launch out to high net worth investors when the index is more stable.

“We do know that we still have a market that is stochastic, and when you have such market, then you don’t have a smooth index. So, we are trying to establish a smooth index. Considering when we have a smooth index, we can then take it to the Pension Fund Administrators (PFAs) and big investors and say this is the trading over a period of time,” he added.