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NSE scraps second-tier securities market, seeks stakeholders support As part of efforts to revive small and medium enterprises investment market, the Nigerian Stock Exchange (NSE) has scrapped the secondtier securities market and amended some of the existing pre-listing rules. It is now known as Alternative Securities/Private Placement Exchange (ASEM/PRIPEX) with effect from December 9, 2009. The usefulness of the second-tier securities market has continued to dwindle with performance below expectations in terms of profitability and return on investment. Also, trading activities in this sector is so low that so far its contribution to the total market capitalization is less than one percent. The approval to go ahead with the name change has been given by the Securities and Exchange Commission (SEC). Funsho Fatobi, deputy general manager/head, ASEM/PRIPEX, said the platform being proposed by the Stock Exchange will provide unrivalled access to companies, many of which may be at a stage of development where a listing on the Exchange Main Board is not yet appropriate, as well as give opportunities to companies interested in retaining their status as private companies to raise funds through private placement and become quoted on the ASEM/PRIPEX subsequently. The Exchange believes that through this platform, the number of listed companies will improve the earnings of The Exchange and provide opportunities to raise funds for further growth. Fatobi noted that most companies that raised funds through private placement between 2005 and 2008 had promised investors that the securities being offered will be listed on the Nigerian Stock Exchange on completion of the issue exercise, unfortunately this has not been the case. As a result, he said huge sums of money have been left unaccounted for in the hands of these business promoters in addition to the fact that there is no exit window for investors to trade the securities bought from the private placements. “The ASEM/PRIPEX will assist in solving these twin problems”, he said. The ASEM/PRIPEX is billed to serve diverse stakeholders and will be made up of various market players which include companies (issuers), issuing house/sponsoring broker, market specialists, investors, advisers, the NSE and SEC. Companies coming on board this platform have been assured that they will gain many benefits enjoyed by experienced companies with full listing on the main market, including access to pool of capital, enhanced profile and increased status, credibility and integrity. For the initial 180 days of take off, the stock exchange is waiving its application or entry fee. Meanwhile, stakeholders in the Nigerian capital market have been asked to team up and work in harmony for the full recovery of the market from the impact of the world financial crisis. Ndi Okereke-Onyiuke, director general of the Nigerian Stock Exchange at a joint national workshop for capital market correspondents, said the Nigerian market is just recovering from the debilitating effects of the global financial meltdown, hence the need for all stakeholders to come together and help in reviving it. Okereke-Onyiuke noted that consumers of media reports are growing in leaps and bounds; as such they need timely and explicit information to take position. “The expectation of investors, foreign or local, from the media is basically to disseminate information that would enhance investment decisions. This may be difficult except the journalist himself is well informed, as no one can give what he does not have,” she said. MODESTUS ANAESORONYE BUSINESSDAY June 7, 2010