Boosting Listings: Technical Committee's Strategies and Engagements

TECHNICAL COMMITTEE ON ATTRACTION OF NEW LISTINGS PRESENTATION AT CMC 14TH November 2018

TECHNICALCOMMITTEEONATTRACTIONOFNEWLISTINGS Mandate Strategy To drive advocacy and other activities towards increasing the number of listed companies on our exchanges. Broad Terms of Reference are: Propose strategies to attract listings form target sectors Undertake relevant advocacy Undertake any other activity that may be relevant to the achievement of its mandate MDA Industry Engagement Engagement Regulator Engagement 12 12 Summary of Activities Technical Committee Est. July 1, 2016 December 2017 Submission of BPE Working Group Report Establishment of BPE Working Group Follow-up meetings with MDAs August, 2016 Identification of Industry groups and MDAs to be sensitized July August November December 2017 2018 November 18 Follow up meetings; Secured Listing through BPE; Working Group Meeting on streamlining issuance process Submission of Final Report Nov-Dec 2016 Preliminary engagements with stakeholders and MDAs

Our Approach Our Approach Conducted sector/industry readiness assessment Identified key strategic industry groups/associations Engaged industry groups to elicit feedback on listing impediments. Secured commitments to educate members and platforms for educating members Engagement with Industry Groups Prepared report on listing incentives and impediments based on feedback from industry engagement; Engagement with MDAs Engaged with policy makers and industry regulators and proposed requisite enabling frameworks and incentives to promote listings Engagement with Regulators Hosted the CAMMIC Working Group on the Issuance Process with the aim of identifying the impediments to new issuances and listings. 3

HIGHLIGHTSOFKEY ENGAGEMENTS Nigerian Communication Commission (NCC) Proposed strategy was to incentivize companies to list by granting licensing fee rebate to listed companies and providing in its guidelines listing as a condition for license renewal. Constrained by its ACT which already stipulates requirements for license issuance and renewal. Recommend a submission of the MTN Ghana IPO as a case study to the NCC. A sub-committee was created in partnership with NNPC to facilitate the process of listing NNPC and its companies on the exchanges. The NNPC recently announced a decision to access the Capital Market to fund its new projects which include the NNPC/NAOCC JV Idu Re- development, South Gas Project, North-Gas Project and Central Gas Project. MAN willing to provide ongoing platform for educating its members on the benefits of listing or raising funds through the capital market by publishing capital market related content in its quarterly magazine. Content to be provided by the Regulator. Nigerian Petroleum (NNPC) National Corporation Manufacturing Association (MAN) of Nigeria Independent Marketers Association of Nigeria (IPMAN) Petroleum The DG committed to disseminating the presentation by the TC to the president and the Board of the association. He further committed to encourage its members to list on the exchanges for sustainability. Nigerian Regulatory (NERC) Electricity Commission The regulator is open to ideas that would fund the liquidity shortfall in the industry. Suggested options included; sale of govt. 40% shareholding and a bond issuance guaranteed by FGN. TC developed a questionnaire targeted at DISCOs to elicit information on the issues facing the sector. Proposed strategy was to incentivize companies to list by granting licensing fee rebate to listed companies and providing in its guidelines listing as a condition for license renewal. Bureau Procurement (BPP) of Public Submitted a preferential procurement policy. Feedback obtained was that a developed capital market would not require incentives. The process with respect to one of the entities has commenced with listing expected by Q42018. Bureau Enterprises (BPE) of Public The BPE may require some waivers to facilitate the introduction of these entities to the Capital Market

Significant Milestone and Challenges Significant Milestone and Challenges State Owned Enterprises (SOEs) The TC s working group with the BPE successfully submitted its report to the DG of the BPE Q42017 recommending action on identified SOEs; The BPE has approved the recommended entities as definite transactions for 2018 and engaged the recommended entities. All entities are on board with the listing agenda The process with respect to one of the entities has commenced with listing expected by Q42018 with another one at early commencement stage. Knowledge of the Capital Market The Engagements by the TC have revealed a poor knowledge of the capital market, its benefits and operation, even among key government agencies. The TC is often times confronted with distinguishing public companies from private companies, the Exchanges from the regulator and the role of the players in the market. We consider this one of the key factors mitigating against increased issuances and listings 5

Highlight of Our Recommendations Highlight of Our Recommendations The TC proposes the following strategies to attract listings; Investor and Stakeholder Confidence The benefits of listing will continue to be a hard sell if issues which ensure investor and stakeholder confidence are not promptly and fairly resolved. Issues regarding corporate governance, information disclosure and unfair treatment of shareholders should be of priority to the regulator. Market Development - Towards attracting players, a focus on market development is imperative to avoid reluctant participants who delist at the earliest opportunity; Selling Document on the Capital Market - Develop a robust document with information on the capital market which highlights the features of the market, players, Regulator, instruments, players, and steps on how to access the capital market for circulation to industry groups and other target sectors. This should include a workbook for end-users; the goal is to have a selling document on the capital market which can be dropped with key regulators, and investment hubs. Advertise the Capital Market - Plan and commission a 10-15 minutes video on the capital market at two levels- a Market level on compliance preferably in Pidgin English and a High level on the size, opportunities and track record. Shareholders Associations - Shareholders Associations have been identified as a major deterrent for investments through the capital market and needs to be addressed through rules which curtail their activities; Trainings - To improve the quality of filings with the SEC/NSE, a comprehensive training program should be institutionalized by the SEC for the capital market. Training would be focused on requirements for IPOs, Rights and other means of accessing the capital market Green Bonds Education for potential issuers on eligible projects to support green bond issuances. The SEC should access every relevant platform to educate the public on the factors which support a good structure, sustainable finance and the benefits of green bonds 6

.And its a Wrap!!!! The full and final report of the Technical Committee can be obtained from the SEC. We thank you all for the opportunity to Serve. 7

- NASD/Chairman Bola Ajomale - NSE/ Chairman (Sept. 2016 Oct. 2017) HarunaJalo-Waziri* Alternate(s) TonyIbeziako - FMDQ OTC Plc EmmanuelEtaderhi - Stanbic IBTC Capital FunsoAkere* Alternate(s) OyindaAkinyemi TayoAdewale - Rand Merchant Bank MichaelLarbie* Alternate(s) KemiOwonubi Biola Adekoya - Vetiva Capital Management Ltd. Chuka Eseka* Alternate(s) Gbadebo Adenrele - FBN Merchant Bank Dipo Ogunbiyi - Securities and Exchange Commission AbdulkadirAbbas* Alternate(s) AbdulsalamSa ad - Securities and Exchange Commission ElizabethEkpo* /Secretary (Sept. 2016 March 2018) Alternate(s) - Secretary GbemiAdekola 8