PUTTING INVESTORS FIRST

CEO’S OPENING REMARKS AT THE 2014 “PUTTING INVESTORS FIRST” DAY IN PARTNERSHIP WITH CFA SOCIETY NIGERIA ON WEDNESDAY MAY 28, 2014 AT THE STOCK EXCHANGE BUILDING, MARINA - LAGOS

Distinguished Ladies and Gentlemen, on behalf of the Management of The Nigerian Stock Exchange, I welcome you all to this capital market initiative.

The Nigerian Capital Market Shows Signs of improved investor confidence…but our job is not done yet.

The improved regulatory environment and performance of quoted companies from 2012 till date, has positively impacted on stock market prices and overall market indices.

All vital performance metrics in the Nigerian Capital Market have bounced back from the critical low to which they backslid in 2008 and have generally remained upbeat with the market capitalization of listed equities on the Nigerian Stock Exchange (NSE) increasing by over 47.33% in the past year alone. Also, the average daily value of shares traded went up by 57.36% from the N2.65b recorded in 2012 to N4.17b EOY 2013.

Year to Date 2014, local Investors participation in our market outweighs foreign participation. It can be recalled that as at end of first quarter 2013, local investors accounted for close to 60% of transaction value in the Nigerian capital market, while foreign investors were responsible for about 40%; this turn of events contrasted sharply with the circumstances between 2009 and the first half of 2012 when local investors eschewed the market on account of losses they sustained in the aftermath of the near meltdown of 2008 with transaction values being controlled by foreign investors to the tune of 80% in certain instances.

It is also no longer news that we have adopted a zero-tolerance stance on dealing member firms and listed companies violations.  We have proposed several rules to codify the accepted mode of engagement in our market.  These rules are available on our website.  Two that might be of particular interest to you are our proposed Related Parties Transaction rule and rules around the conduct of AGMs.

We have also started building out a robust financial literacy program.  Back in February 2012, we kicked off our financial literacy program as a first step in protecting investors.  This program aims to enhance investors’ understanding of the basics of investing around portfolio construction, asset allocation and risk diversification.  The “Investor Clinic” aspect of the program, which is a flag ship product for our financial literacy efforts, has been delivered in partnership with stellar organizations such as Morgan Stanley, Stanbic IBTC, Greenwich Trust and FBN Capital, just to name a few.  These have primarily been focused on particular segments of the investing community to discuss the finer details of investing and to shed more light on the capital market eco system.  The two clinics convened last year, targeted professional bodies and religious associations with the last one having us shift gear to a very important constituency, the registered shareholders associations.

Additionally, 287 investor education workshops were conducted for “grassroots level” investors (civil servants, students, SMEs, etc.) across Nigeria via our thirteen branch offices.

On the Technology front, we rolled out X-Gen, which is our new generation Trading Platform that supports our effort to drive our market to a higher level.  X-Gen opens an unprecedented level of innovative trading capabilities for the Nigerian capital market, providing direct market access for both the buy and sell sides, and mobile access through smartphones to the retail investors.  Therein lies an opportunity for engagement with the 120 million mobile phone owners across the country.  The new trading platform has also improved the overall quality of market experience for all stakeholders.

Ladies and Gentlemen, while The NSE’s focus from 2011 to 2013 has been on revamping corporate governance, improving human capacity, cleansing and restructuring the market, improving technology, product development, and advocacy for changes to policy, from 2014, we are determined to shift gears to drive innovations centred on increasing global visibility for the Nigerian capital market.  We intend to develop a larger footprint on the African continent and ultimately, targeting emerging market status.  That is why we are very much in support of the WACMI efforts and similar programs. This will open opportunities for you, the Nigerian investors, to extend your reach.

We believe that these steps are critical to The NSE becoming the foremost securities exchange on the continent.

The NSE supports and believes in the CFA’s “Future of Finance” project and sees positivity in your goals of helping to build awareness of the fiduciary duty to protect investor interests.

I thank you all for listening and hope you have an enlightening and interactive session.