Nigerian Stock Exchange

There is plenty of investment appetite for African stocks among institutional investors, and the continent’s financial markets are taking notice.

Nigeria, South Africa, Kenya and Angola have all recently pushed ahead with plans to deepen and improve their financial markets. But there is still a long way to go. 

Nigeria might be trying to lure local companies into listing on its stock exchange, with flotation activity set to increase – but it’s not the only one. London is stepping up its efforts too for listings in tandem. 

A strong market rally and improved regulation could tempt up to 20 companies to list on the $54bn Nigerian Stock Exchange in 2013, according to its chief executive officer Oscar Onyema.

The NSE has struggled since a crash in 2008 wiped more than two-thirds off the value of the All-Share Index and damaged investor confidence. Since 2009 there have been only a handful of small listings, compared to 88 between 2006 and 2008.

But in the year to date, the All-Share Index is up 28 per cent – and so is corporate sentiment about coming to market. 

Small companies in Nigeria rejoice! A formal exchange for over-the-counter (OTC) trading is set to open in the country next month, a move that should create greater liquidity for small companies and more transparency for investors looking to invest in unlisted securities. The National Association of Security Dealers (NASD), initially set up as an association of stockbrokers, is behind the new platform.

OTC trades are those conducted through dealer networks rather than central exchanges, a route usually used by smaller companies and those that don’t meet listing requirements.