Abuja — Arunma Oteh, Director General of the Securities and Exchange Commission (SEC), at the weekend hinted of plans privatise the Nigerian Stock Exchange (NSE).

To this end she said the SEC wants to bring in "a first-class team" to run the exchange. "What we expect is the principal officers will come onboard, at the latest, in the beginning of next year. After they come onboard, what we intend to do is to put in place a timeline for demutualization." Ms Oteh who dropped the hint in London said the SEC is still looking at different models used around the world in privatizing stock exchanges.

Ms. Oteh said one model that is "fascinating" is the deal between Brazil's BM&FBovespa and the Chicago Mercantile Exchange. "CME got to invest in Bovespa and vice-versa, Bovespa got to invest in CME. We thought that demutualization process is extremely successful, so it's one of the models we're looking at," she said.

She said the SEC will be tough against fraud and cases of insider trading and share-price manipulation, factors which are seen to have caused the bubble and the ensuing fall in the Nigerian stock market last year. "As a regulator, we have zero tolerance for anything that is improper," she said.

Data from market-data provider Factset show that the Nigerian All-Share Index had a massive 70% fall from a high of 66371.2 in March 2008 to a low of 19803.6 in March 2009. It has since recovered mildly to around the 24200 level.

Ms. Oteh said she expects more asset classes to be traded in Nigeria. "Other products that we hope to focus on our exchange are exchange-traded funds and Islamic funds, given that our country is at least 50% Islamic."

She said the country "must have a vibrant fixed-income market." To help achieve this, she said the government has removed a discriminatory tax difference which favors investing in sovereign bonds instead of corporate bonds. Ms. Oteh also expects more domestic and foreign companies to list on the NSE.

"We have a petroleum industry bill that will go through the National Assembly very soon. We expect that to create an opportunity for the national petroleum company to list as part of joint ventures with Shell, Mobil or other international oil companies on the exchange," she said.

"There is an initiative to encourage telecommunications companies to list in the market. So we can see companies like MTN [Group], which makes 40% of their worldwide profits in Nigeria, potentially having an opportunity to list on the market. We can see companies like Bharti [Telecom], which has acquired assets across Africa, to look at also listing on the market."