The Nigerian Stock Exchange (NSE), on Tuesday, in Lagos launched a new listing platform; the Premium Board and the associated Premium Board Index (PBI).

It was gathered that the board would feature companies that meet the Exchange’s most stringent listing criteria of capitalisation, governance and liquidity.
It aims at providing 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 companies that have qualified for the Premium Board are 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 board.

On the other hand, the PBI is an equity index designed to provide a benchmark to capture the performance of companies listed on the Premium Board.

The index would 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 effort is in keeping with Exchange’s commitment to promoting Africa’s biggest companies, as well as influencing the economic growth and development of Nigeria.

“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 to adopt sustainable ways of doing business around Environmental, Social, and Governance dimensions. The Premium Board is one result of our commitment to place corporate governance front and centre as a way to improve the climate for doing business in Africa.

“We expect that companies on the Board will enjoy the highest levels of visibility and appeal to investors looking for large companies with the highest standards of corporate governance.” The Premium Board 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 per cent versus the All Share Index return of 11.31 per cent over the same period, “he said.

“The Premium Board is for issuers with minimum market capitalization of N200 billion and highest corporate governance standards. Companies aspiring to be listed on the Premium Board must achieve a minimum score of 70 per cent on the stringent Corporate Governance Rating System (CGRS). In addition, they are required to maintain a minimum free float of 20 per cent of their issued share capital or a free float value equal to or above N40 billion, “said, Executive Director, Business Development, NSE, Mr. Haruna Jalo-Waziri.

He added,  “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.”