This is a massive one and it is coming just as 2022 closes. Yes, the Securities and Exchange Commission has approved the rules for listing on Nigeria Exchange’s new Technology Board. With this playbook, companies like Flutterwave, Interswitch, Touch and Pay, etc can have a clear destination to the public market without buying flight tickets to London and New York.
Of course, the main issue besides the opportunity is the investors: how would they price these companies? Indeed, when I see that eTranzact International Plc is valued at $53 million, I conclude that NGX retail investors need more lessons on tech and opportunities therein.
Yet, this is a step in the right direction: we need to have our own NASDAQ in Nigeria. In a world with Omatek Plc, Courteville Business Solutions Plc, NCR Plc, Chams Plc, Computer Warehouse Group (CWG) Plc,
Tripple Gee & Company Plc, Airtel Africa and MTN Nigeria, we can to add new species therein.
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===Press release
Nigerian Exchange Limited (“NGX or “The Exchange”) is pleased to announce that the Securities and Exchange Commission (SEC) approved the Rules for Listing on NGX Technology Board on 15 December 2022.
The NGX Technology Board is a specialised platform for technology-based companies to list and raise capital on The Exchange. Through the Board, NGX aims to encourage investments in indigenous technologically inclined companies and others across Africa, provide greater visibility to these companies and ultimately deepen the Nigerian capital market. Securities listed on NGX Technology Board will be accessible to qualified institutional investors, retail investors, and high-net-worth investors.
Commenting on the approval of the Rules, the Chief Executive Officer of NGX, Mr. Temi Popoola said, “This is a landmark achievement that will position the Exchange as an attractive destination for capital formation by companies within the Technology Sector. It also attests to NGX’s dedication to deepening the Nigerian capital market. On behalf of the Board and Management of NGX, I would like to express our appreciation to the SEC for approving the Rules. I would also thank the Board of NGX for their invaluable contribution during this process. We are confident that NGX Technology Board will encourage start-ups, both Nigerian-founded and from other African countries, to list on the Exchange as they work towards meeting their financing needs.”
The CEO of NGX RegCo, Ms Tinuade Awe on her part said, “The approval comes after deliberation on the draft Rules by the Regulation and New Business Committee (RNBC) of NGX RegCo and the consideration of stakeholders’ comments on the exposed draft rules, followed by the subsequent submission to and approval by the Board of NGX RegCo. We are much obliged to the SEC for its quality input and approval of NGX Technology Board Rules.”
NGX, the sustainable exchange championing Africa’s growth, is committed to stimulating the technological transformation of the capital market and the development of Africa’s technology sector.
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It’s a good one, saw the news yesterday, and we can actually make it bigger and attractive. I am thinking of adopting a ‘free trade zone’ model for it, in this case – we can build a compelling story, making it Africa’s Tech Exchange of choice.
As for the valuations, we have a sizable African diaspora bloc it can be marketed, which will help the local retail investors to price more competitively. If we can get about 20% of diaspora remittances to be channeled to investment via Tech Exchange, then we are guaranteed billions of dollars per annum; it’s a framework that can be developed and diligently executed.
The startups listed don’t need to be valued as high as the ones in the New York Exchange, but they can still command great value, because we can be leaner and more efficient, Americans waste money carelessly; we can be less speculative.
Let’s just try and stabilize our political landscape after 2023 elections, then we can easily get these things up and running, the potential is there.
Those who know how to build should continue building…