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NGX to set up new listing category for tech companies

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3 years ago

February 9, 2022

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The Nigerian Exchange Limited (NGX) is planning to set up a new listing category for technology companies in the country.

Speaking with CNBC Africa recently, NGX Chief Executive Officer (CEO), Temi Popoola, said the new listing category will be called the technology board and will be designed “fit for purpose”.

Popoola said the exchange is working hard to ensure that the conditions around the admission of companies into the new category are attractive enough to draw promising tech firms.

He disclosed that the NGX plans to mold the technology board after the United States NASDAQ index, which is dominated by some of the biggest tech organisations in the world.

The NGX CEO noted that the move is to avoid losing most of the tech firms in the country to foreign exchanges in order to boost the activity of Nigeria’s stock market.

Popoola said the stock market is in talks with the apex regulator, Securities and Exchange Commission, to get the approval without stating when the board will be delivered.

He said: “In that board, there are lots of what you might call structural challenges that will preclude tech companies from listing, which we look to address – things around the rules, the barriers, and the entry for traditional companies, the governance requirements and the like.

“If you look around you, there is a technology capital formation perhaps every other week … One question we have to naturally ask is how we can make a lot of that capital formation happen on the exchange.”

It is understood that a good number of tech start-ups in Nigeria from Paystack to Flutterwave are incorporated in the U.S., with e-commerce powerhouse Jumia (backed by German investors) already listed on the New York Stock Exchange.

Nigeria’s tech ecosystem has never been more vigorous and its reputation as the tech capital of Africa has drawn overseas venture capitalists seeking investment in markets with potentiality and growth.

Of the aggregate sum the continent drew last year, Nigeria accounted for $1.4 billion or 35 per cent, with Interswitch, OPay and Flutterwave already accorded unicorn status – the elite class of firms with at least $ 1 billion in valuation. That compares with a total of seven of such in Africa