NGX mulls non-depository receipts to deepen capital market

By Cynthia Ezekwe

The Nigerian Exchange Limited (NGX) has announced plans to launch Non-Depository Receipts (NDR) to further deepen the Nigerian capital market.

Jude Chiemeka,divisional head, capital markets, NGX, made the disclosure  during a fireside chat themed “Investor sentiment on Nigeria: success and challenges”, at the 2023 Nigeria risk summit, held recently  in Lagos.

According to Chiemeka, the NDR would grant the investing public access to financial instruments listed on an offshore exchange and provide investors with access to alternate investment schemes.

“With this initiative, asset managers will sponsor this instrument offshore, convert the receipts and sell off in our local market; At the end, we are not only enabling exposure to foreign exchange, but we are also preparing a marketplace with a broader spectrum of participants, ‘’ he explained.

Chiemeka also  noted that in 2022, NGX  2022 got approval from the Securities and Exchange Commission (SEC) on its Technology Board Listing Rules, stating that the  aim of the initiative is to encourage investments in indigenous technologically inclined companies within Nigeria and across Africa by providing greater visibility to various companies.

“In recognizing the importance of investor education to a healthy market, NGX had partnered with the IFC and Islamic Development Bank to train capital market participants on the impact of sustainable and Islamic finance respectively,” he added.

Speaking further on partnership opportunities within the capital market, the divisional head explained that the Exchange had partnered with other stock exchanges like the London Stock Exchange (LSE) to offer dual listings to corporates and increase the size of the market where investors can invest in a broader-based market.

He further added that NGX is working with the Ghana Stock Exchange (GSE) to improve on secondary listings that will develop private market utilization of technology.