NSE Introduces Growth Board For SMEs To Raise Capital, Trade Shares
The Nigerian Stock Exchange (www.nse.com.ng) today launched its Growth Board as part of its initiatives to deepen the market and increase trading activities.
At the official launch of the Board, the Exchange said this would attend to the need of fast growing small and medium sizes companies to use the Exchange for capital raising activities and shares trading.
According to NSE, the Growth Board is expected to attract small and medium-sized companies that exhibit the potential for fast growth in their corporate earnings and are in the growth phase of their business cycle.
With this, the total number of boards maintained by the NSE has increased to four as it includes the Main, ASEM, Premium and Growth Boards.
Speaking at the launch, Oscar Onyema, the Chief Executive Officer, said that the initiative was in line with the Federal Government’s diversification drive for economic growth and development.
Onyema said that the Growth Board aimed to encourage companies with high growth potential to seize the opportunity of raising long-term capital and promote liquidity in the trading of their shares.
“The board also presents as an avenue for companies in their growth phase to leverage the NSE’s platform and varied products and services to achieve their long term business objectives,” he said.
Onyema explained that the board was designed to offer relaxed entry criteria and less stringent ongoing listing requirements, and allows for greater accessibility to capital flows, global visibility and credibility through corporate disclosures.
According to him, the growth board also restructures current market segments to better meet needs along company’s entire life cycle.
He highlighted that the growth board would be in segmentation, namely entry platform and standard platform.
The NSE chief held that entry platform would be for companies with a market capitalisation from ₦50 million and above while standard platform would be for institutions with a market capitalisation between ₦500 million and ₦4 billion.
According to him, the segmentation of the boards provides alternative options for interested investors to participate in each company’s growth journey.
“To successfully achieve our listed company’s growth strategy and listing objective, the NSE will be collaborating with various strategic business partners and value added service providers to offer cost effective services designed to create a competitive edge for listed companies within their respective industries.
“This platform is pivotal to our efforts in catering to a segment of the economy that hitherto has been neglected and perceived as a high risk and low reward venture by most service providers, especially in relation to access to capital from financial institutions.
“The traditional role of the Exchange as an enabler of capital flow from areas of surplus to deficit holds good promise for its capability to support SMEs, as access to capital is the prime challenge faced by companies that are active in the SME sector.
“I must thank all our strategic business partners and value added service providers for their drive and commitment to support and grow the SME segment of the Nigerian economy,” Onyema said.
He explained that the SME space remained critical to the growth of the economy, noting that it had contributed about 48 per cent to the national GDP in the last five years.
“This segment of the economy also accounts for 96 per cent of operational businesses and 84 per cent of employment.
“With a total number of about 41.5 million enterprises, the SME segment accounts for nearly 90 per cent of companies operating in the manufacturing sector and 50 per cent of industrial jobs,” he said.
Also, Head, Listings Business Division, Olumide Bolumole, said: “The launch of the NSE Growth Board further re-affirms NSE’s long standing tradition of supporting the development of SMEs in Nigeria by offering entrepreneurs opportunities to access finance and scale their businesses.
“The Growth Board is expected to attract small to medium-sized companies that exhibit the potential for fast growth in their corporate earnings and are in the growth phase of their business cycle.
”It will also offer investors the opportunity to invest in such companies with potential for high returns/capital gains,” he said.
NSE Introduces Growth Board For SMEs To Raise Capital, Trade Shares by Ogochi Ndubuisi