The Nigerian Stock Exchange, NSE, has launched a new listing platform, the Premium Board and the associated Premium Board Index.
The Board will feature companies that meet the Exchange’s most stringent listing criteria of capitalisation, governance and liquidity.
It aims to provide a platform for greater global visibility for eligible African corporates to make it easier for them to attract global capital flows and reduce the cost of funding.
The Premium Board Index on the other hand, is an equity index designed to provide a benchmark to capture the performance of companies listed on the Premium Board. The index will also provide a basis for developing products (such as ETFs and equity index derivatives) that are tradable on the bourse.
Commenting on the new listing Board, Chief Executive Officer, NSE, Mr. Oscar Onyema said, “The Exchange is a member of the United Nation’s Sustainable Stock Exchange Initiative, which is designed to encourage stock exchanges to influence their ecosystem and adopt sustainable ways of doing business around environmental, social, and governance dimensions.
The Premium Board is a result of our commitment to place corporate governance in front as a way of improving the climate for doing business in Africa. We expect that companies on the Board will enjoy the highest level of visibility and appeal to investors looking for large companies with the highest standards of corporate governance.
Speaking on this development, the Executive Director, Business Development, NSE, Mr. Haruna Jalo-Waziri, stated that “the launch of Premium Board and the Premium Board Index is in line with the NSE’s commitment to promoting and continuously developing a more transparent, liquid, accessible market.
“The Premium Board is for issuers with minimum market capitalisation of N200 billion and highest corporate governance standards. Companies aspiring to be listed on the Premium Board must achieve a minimum score of 70 percent on the stringent Corporate Governance Rating System, CGRS.
“In addition, they are required to maintain a minimum free float of 20 percent of their issued share capital or a free float value equal to or above N40 billion.”
The index would serve as a benchmark for investors looking to track the performance of large firms with excellent corporate governance and sustainable business models. Typically, similar indices outperform their market wide index by double digits.
The NSE Premium Board Index had a four year average return of 17.65 percent versus the All Share Index return of 11.31 percent over the same period. Dangote Cement Plc, FBN Holdings Plc, and Zenith International Bank Plc with market capitalisation of N2.87 trillion, N277.70 billion and N587.43 billion respectively. They all passed the CGRS before applying for the Premium Board.

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