In 1960, the Nigerian Stock Exchange was founded, but operation actually began in 1961 with about 19 securities listed for trading in Lagos where it was established. Like Nigeria which got her independence in 1960, but became a republic in 1963, the name of the Nigerian stock market metamorphosed from Lagos Stock Exchange, the founding name in 1960, to The Nigerian Stock Exchange in 1977.
In 1960, the Nigerian Stock Exchange was founded, but operation actually began in 1961 with about 19 securities listed for trading in Lagos where it was established. Like Nigeria which got her independence in 1960, but became a republic in 1963, the name of the Nigerian stock market metamorphosed from Lagos Stock Exchange, the founding name in 1960, to The Nigerian Stock Exchange in 1977. As a market that serves as a platform for the mobilization of funds or capital for long term investment or developmental projects, the exchange has many branches in cities throughout the country; Kaduna branch came in to existence in 1978, Port Harcourt branch came in to existence in 1980, Kano branch 1989, Onitsha branch 1990, Ibadan branch 1990, Abuja branch 1999, Yola branch 2002, Benin branch 2005, Uyo branch 2007, Ilorin branch 2008, Abeokuta branch 2008, Owerri branch 2009 and Bauchi branch 2009.
As of September 5, 2012, The Nigerian Stock Exchange had about 200 companies listed with a market capitalization of about N7.8 trillion which is more than the nation’s entire budget for this year!
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However, the market is fast recovering from the bloody nose given to it by the global economic crises which originated from the United States of America. Before the crisis, the market capitalization of the NSE was around N13 trillion, but when it took its own share of the compulsory global bitter pills, the market capitalization and other indices used in measuring the strength of the market shranked astronomically. Just like life, which is not fair to all, the crashed market recorded its own casualties; among whom were people who used their entire life savings to invest in the market with the belief and hope that their future will be secured and greater than their past. This shows that life has no specific formula!
Following the indifference that greeted the market from all sides after the
economic crisis comparable only to the “Great Depression”, the Federal
Government decided to re-jig the market through various means. Some of them
include the exception of the Value Added Tax VAT and Stamp Duty Charges on
transactions carried on the Stock Market. All these policy relaxations were
meant to attract and restore investors’ confidence in to the market.
Nonetheless, sectoral analysis of the market shows that, the telecommunication sector is under-represented. It is even more disheartening that, none of the major national telecom company’s shares are
traded on our stock exchange market! Is it not farcical that a sector that
makes about N90 billion on monthly bases is not quoted on the NSE? What is
really happening to this sector? Or is it a deliberate action? Is there any
double standard dealing somewhere? Investigations have revealed that some
of the multinational companies whose shares are duly traded on other stock
exchange markets are not quoted on our own stock exchange market.
Does that mean Nigerians don’t deserve to be part owners of these companies? The raison d’être behind such practice is still indiscernible to Nigerians!
Until a cogent and verifiable reason is offered, Nigerians will keep asking
for answers to the above questions. But, let me state categorically that,
if it is a deliberate policy and efforts are made and sustained to ensure that Nigerians
should not be part owners of these companies, whereas other multinational
companies in other sectors are duly quoted on our stock market, then they should not like our money, because, you can’t like our money and deny us
access and the privilege to be part owners of the companies that render the
services which we consume!
Similarly, it may be convenient to allude that they are not lacking funds
in their operations, but the fact remains that, getting the stocks of these
companies quoted on the NSE will give Nigerians the sense of belonging in
the companies that do business in their backyards.
It will also push the Federal Governments to tackle poverty head-on. A booming capital market is a plus for both the government and all the companies doing business in the country, because, when the chips are down, the market serves as the nexus for the mobilization of long and medium term funds for business expansion or re-invention of moribund businesses. Finally, the management of the Nigerian Stock Exchange should review the fees charged for enlisting new companies on the exchange market. As of now reports indicate that the NSE charge 0.3 percent of the prospective company’s market capitalization before enlisting it on the Main Board of the exchange market whereas the Johannesburg Stock Exchange and the Nairobi Stock Exchange charge 0.04 percent and 0.06 percent of the prospective company’s market capitalization, respectively. Something drastic must be done to push the government to re-invent the Nigerian Stock Exchange Market!
Comrade Edwin Ekene is the National President of Young Nigerians for Change.
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No. 29, Ben Mbamalu Crescent, Achara Layout, Enugu State
The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of SaharaReporters
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