Former NSE President Aig-Imoukhuede: Demutualisation is an enabler

The demutualization of the Nigerian Stock Exchange has been a long-awaited and transformative process that is set to pave the way for greater competitiveness and innovation in the country's capital markets. In a recent interview with CNBC Africa, Aigboje Aig-Imoukhuede, the former President of the National Council of the Nigerian Stock Exchange, highlighted the significance of demutualization as an enabler rather than an end in itself. Aig-Imoukhuede emphasized that demutualization is a critical step that will remove constraints and barriers to competition, ultimately enabling the exchange to enhance its competitiveness. One of the key changes that demutualization will facilitate is the entry of non-traditional intermediaries, especially technology companies, into the distribution of exchange products and securities. This shift is crucial for expanding retail participation in the capital markets, as technology-driven companies are better positioned to reach a wider audience. Furthermore, demutualization will empower the Nigerian Stock Exchange to adopt new business models that align with global standards and practices. By becoming an infrastructure provider to the capital markets, the exchange will have the flexibility to offer a diverse range of services and products that cater to the evolving needs of investors and market participants. Aig-Imoukhuede drew parallels with demutualized exchanges like the London Stock Exchange, highlighting the potential for the Nigerian exchange to leverage its newfound status to drive innovation and efficiency. Importantly, demutualization will also introduce a heightened level of accountability for the board and management of the exchange. As a publicly traded company, the exchange will be subject to market scrutiny and investor expectations, driving a focus on delivering sustainable returns. In the future, Nigerian investors are expected to have the opportunity to access shares in the exchange, further democratizing ownership and participation in the capital markets. In addition to the initial public offering (IPO) that will enable Nigerians to invest in the exchange, Aig-Imoukhuede discussed the potential for mergers and acquisitions (M&As) as a means of further enhancing the exchange's capabilities and reach. He highlighted the possibility of geographic expansion, acquisitions of technology companies to bolster technological capabilities, and the consolidation of emerging exchanges within the local market as potential avenues for value creation through M&As. As the demutualization process unfolds, Aig-Imoukhuede reiterated the commitment to ensuring that the dividends of demutualization are effectively delivered to the people of Nigeria. The journey towards a demutualized Nigerian Stock Exchange represents a significant milestone in the country's financial landscape, with far-reaching implications for market efficiency, innovation, and investor participation.