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THE CEO SECTORAL DINNER: An Interactive Engagement with the Healthcare Sector

Welcome Remarks By

Oscar Onyema CEO

The Nigerian Stock Exchange

Federal Palace Hotel | March 20, 2014

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20-March-2014 The Nigerian Stock Exchange 2

Introduction: Objective of the CEO Dinner

• The CEO dinner was inaugurated as part of our initiative to add value and create an avenue for prospects to interact with listed companies and key influencers within the same sector. Past dinners have focused on the Agriculture, ICT, Industrial Goods and Utilities sectors.

• These dinners entail:

The Benefit & Roles of the Capital

Market

Issues of Common Concern for Advocacy

Question and Answer Forum

Click to edit Master title style | Overview of our Listing Boards

• Specialized growth Board for SME’s

• 10 Quoted Companies, 1 in Healthcare Sector

• N3.96bn equity market capitalisation as at 19/03/14

• The NSE Premium Board will be driven by the following:

• Stringent corporate governance standards;

• $1 billion minimum market capitalization requirement;

• Global standards

Our ASeM Board promotes a

growth capital platform for

entrepreneurs

The NSE ASI reflects our Main

Board’s performance and

was ranked in the top ten

global indices in 2013

The Premium Board will

promote global best practices

amongst “African

Champions”

• Large sized blue chip companies

• 187 Quoted Companies

• 10 Companies listed in the Healthcare Sector accounting for 1% of total market cap

• N11.93tn equity market capitalisation as at 19/03/14

Premium Board

The Nigerian Stock Exchange 3 20-March-2014

Main Board

Click to edit Master title style | The Healthcare Sector

• Gov’t spending in the sector as a proportion of GDP was 0.05% in 2013

• Brazil – 9%, South Africa – 9%, India -4.1%, & Indonesia – 2.6%

Segmentation of the Healthcare Sector

Construction/Real Estate

Consumer Goods

Financial Services

Industrial Goods

Agriculture

ICT

Natural Resources

Oil & Gas Services

Utilities

Conglomerates

Healthcare Subsectors

• Healthcare Providers

• Medical Supplies

• Pharmaceuticals

The Nigerian Stock Exchange 4

The Healthcare Economy

• Over 130 Registered Pharmaceutical Manufactures in Nigeria; 8 listed

• Approx. 1,400 healthcare providers; 2 listed

• Approx. 790 Med suppliers; 1 listed

NSE’s Role in the Healthcare Sector

20-March-2014

Healthcare

**Not drawn to scale

Click to edit Master title style | Our Performance at a Glance

Total Market Capitalization Average Daily Value Foreign/Local Traded Value (%)

10

12

14

16

18

20

2012 2013

NG

N (

=N=

tri

llio

n) 28.92

%

2.0

2.5

3.0

3.5

4.0

4.5

2012 2013

NG

N (

=N=

bill

ion

)

78.81%

47.19% 44.05%

29.60% 26.50% 20.28% 17.85% 15.34% 14.43%

2.87%

-2.24% -2.62% -7.05%

-15.50%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

GhanaComp.

NSE ASI Nairobi ASI S&P 500 DJIA FTSE AIM FTSE/JSE EGX 100 FTSE 100 Hang Seng Mexbol MASI WIG 20 Ibovespa

Strong Regional and Global Performance Amongst Selected Exchanges in 2013

50.94% 49.06%

Foreign Investors Local Investors

57.36%

N14.80 Tr

N19.08 Tr

N2.65 Bn

N4.17 Bn


**Not adjusted to US Dollar standard

Click to edit Master title style | 2013 Market Highlights

The capitalization of listed equities grew by 47.33% from N8.98 trillion to N13.23

trillion; the NSE All Share Index (ASI) gained 47.19%; and average daily turnover for

equities was N4.17 billion, up 57.36%.

Successful launched of X-Gen which supports trading of cash equities, bonds, and

ETFs, and the first-ever issuer reporting portal in Nigeria, X-Issuer. The bourse also

re-launched the Alternative Securities Market (ASeM) for small and medium

companies, and introduced a new market structure for trading equities, along with

fixed-income market making. $1 Trillion Market Cap


Click to edit Master title style | NSE 2014 Key Initiatives

Increase new listings o Product Launches (Premium

Board, NDRs, Derivatives) o Competitive Fee Structure o African Listings Drive

Increase order flow o ‘Generation Y’ Trading Tools o Transformation of Market

Operators

Operate a fair and orderly market o World-Class Surveillance Program o Rules Portal o Operation of the IPF o Risk-Based Supervision Framework

Champion the development of enabling laws and policies o Corporate Governance /

Corporate Social Responsibility o Enhanced Government Relations o Integrated Investor Education o Capital Market and Economic

Development Program

Diversify our income streams o Co-Location, Co-Hosting &

Disaster Recovery Services o Online Data Shop

MEDIUM-TERM INITIATIVES


Click to edit Master title style | Nigeria’s Healthcare Sector Challenges

The Nigerian Stock Exchange 8

INFRASTRUCTURE/ EQUIPMENT

ACCESS TO SUSTAINABLE FINANCING

INFLUX OF SUB-STANDARD

DRUGS

POOR REMUNERATION OF

HEALTH PRACTITIONERS

GOVERNMENT

POLICIES

BURGEONING HEALTH INSURANCE SECTOR

20-March-2014

Click to edit Master title style | Key Benefits of Listing on the Exchange

Access to investors

focused on high growth

potential SMEs in emerging

markets

Policy Advocacy for listed companies

Reduction of financial burden and risk

spreading amongst shareholders

Professional guidance (DAs) for ASeM

companies to ensure company benefits from and maintains its listing

status

Opportunity for initial investors to realise some or all of their

investment

Capacity building through access to a

bouquet of discounted value added services

Platform for facilitating long

term sustainability

Membership of a global platform that affords brand visibility and

credibility enhancement

Access to long term capital for growth and

expansion


Click to edit Master title style | Come Join our Listed Healthcare Companies


• The Exchange offers a unique opportunity for unlisted companies to grow their access to financing.

• As at March 19th, the average P/E ratio in the Healthcare Sector equates to 21.1x*.

• Additionally, the average stock performance between FY’12 to March 19, 2014 equates to 34%.

Financial Services

Industrial Goods

ICT Oil & Gas

Services

Utilities

Conglomerates

* Includes 4 of the 11 listed companies based on available information

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Thank You

Stock Exchange House

2 - 4 Customs Street

P.O. Box 2457, Marina

Lagos Island, Lagos, Nigeria

[email protected]

THANK YOU

Questions & Answers

“PARTNERING WITH THE NIGERIAN STOCK EXCHANGE

TO TRANSFORM THE HEALTHCARE SECTOR IN NIGERIA”

Presentation by

PROF. C. O. ONYEBUCHI CHUKWU

Honourable Minister of Health

AT THE CEO QUARTERLY DINNER OF THE

NIGERIAN STOCK EXCHANGE HELD IN LAGOS

ON THURSDAY, 20TH MARCH, 2014

1. Preamble

2. Investment case for the Health Sector

3. The Nigerian Economy and the Health Sector

4. The National Health Policy and the National Health Plan

5. The Transformation of the Health Sector

6. Bankable Projects

7. Public Private Partnership

8. Conclusion

2

The Big Questions:

Social Service vs Business

Whose Responsibility: Public Sector or Private Sector?

3

Investment Case For the

Health Sector….1

• A robust and rapidly growing economy

• Large Market

• High demand for Health Care Services

• Out-of-Pocket Expenditure (70%)

4

4

Investment Case for the

Health Sector…2

• The National Health Insurance Scheme 1.Formal Public Sector

2.Private Health Insurance

3.Voluntary Contributor Social Health Insurance

4.Community-Based Social Health Insurance

• The National Health Bill

• UHC Declarations

5

Many incentives on offer such as:

◦ Zero duty on medical equipment

◦ flexible expatriate quota on

personnel recruitment and

repatriation of earnings

◦ tax holidays, etc .

7

Healthcare services are provided by both the

Public and Private Sectors.

Private Sector providers include private (for

profit) health institutions, faith-based

organizations and voluntary not-for-profit

organizations.

The Public Sector on the other hand comprises

all the three tiers of government (Federal, State

and Local Government)

8

While, The Private Sector engages in all aspects of healthcare service delivery,

Local Governments devote their resources to the provision of primary healthcare; States to the provision of secondary healthcare (comprehensive health care, general hospitals);

the Federal Government concentrates on Tertiary Healthcare.

However, in practice, the Federal Government is involved in both primary and tertiary care, and a number of State Governments operate tertiary health institutions.

9

The NSHDP (2010 – 2015) is a costed plan-the Health component of Vision 20:2020. Total estimated cost of the NSHDP for the six year period is #4.1Tr (about USD26.6billion). This gives an annual cost per capita of #4,745 (about USD31.63). Investment is expected to be borne jointly by the Government, Private Sector, Donor (Development) Partners, and the individual citizen/resident.

10

Transformation of the Health Sector

Federal Hospitals upgraded/modernized

Training of Health Personnel

Involvement of the Private Sector

11

INVESTMENT INCENTIVE MEMORANDUM OF

UNDERSTANDING (IIMOU)

Ministerial Committee on the Establishment of World Class Hospitals and High-End Diagnostic Centres

12

The Country-to-Company MoU with

GE: • Private Co-investors

• Government provides enabling environment

• equity in kind or cash

• Facilitates acquisition of land

• provides infrastructure

• regulates industry

13

Project A: Development of 2 or more Specialist Hospitals and 2 or more Diagnostic Centres

Project B: Management & Technical Training

Project C: Rural Health Solutions

Project D: Small-Holder Specialist Medical Facilities.

Project E: Co-location models of Public Private Partnerships

14

• To carry out a critical analysis of the apparent

low public sector investment in World Class

Specialist Hospitals and High-End Medical

Diagnostic Centres;

• To draw up strategies with a road map for the

unlocking of Private Sector entrepreneurship in

Nigeria’s health sector such that Mr. President’s

vision of at least one world class Private Sector

hospital in each geo-political zone is achieved;

15

To identify and engage potential investors with a

view to guiding them to develop business models

and plans for the establishment of World Class

Hospitals and High-End Diagnostic Centres in

Nigeria;

• To propose an accreditation scheme that would

ensure full compliance with global best practices in

the operation of these facilities.

16

• Specialist Hospitals

• Trauma Centres

• Diagnostic Centres

• Mobile Clinics

• Ambulance Services

• Small Holder Specialist Clinics (different specialties of medicine and

surgery)

• Pharmaceutical Manufacturing

• Generic Drugs eg ARDs, ACTs

17

A Web-Based Directory and information database of Top

Nigerian Health Expertise, hospitals and high-end

diagnostic Centres.

Central Medical Library

Reference Laboratory for quality assurance of medicines

and medical products

Undergraduates and Postgraduate Training Institutions.

Rapid Diagnostic Test Kits ( HIV, Malaria)

Life Saving Commodities for women and children’s

Health eg Zinc Sulphate, Misoprostol, Magnesium

Sulphate.

18

Facility Management

Design-Build-Finance-Operate

Lease, Build, Operate and Transfer

Build-own-operate-transfer

Stand-Alone Project

Facility Upgrade

19

Models of Co-Location PPP

Radiology eg CT, MRI, Interventional Radiology

Immunology, Forensic Pathology

Medical Rehabilitation Centres

Health Spas, Wellness Gymnasia

Luxury Suites,

High Dependency/Critical Care Units.

20

(Commissioned New Cardiac Unit –

INVESTMENT OPPORTUNITIES

HMH inspecting newly installed

equipment at the CAT-Lab, UCH, Ibadan.

Newly installed equipment at the CAT-Lab, UCH,

Ibadan.

21

FMC KEFFI

FEDERAL STAFF HOSPITAL, ABUJA FEDERAL STAFF

HOFFEDERAL EDERRAL

SfTAFF HOSPITAL

ABUJffffASPITAL

AABUJA

CONCLUSION The Health Sector today is an investor destination

and haven because of the business-friendly

policies of the government and the country's rapidly

growing economy.

I invite you to exploit this and furthermore to take

advantage of all that is on offer under the

government’s pro-investment policies and partner

with Government to transform the health sector.

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RC NO: 649007

RC NO: 649007

RC NO: 649007

…leading the change

CORPORATE PROFILE

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RC NO: 649007


RC NO: 649007


Benefits Accruable from The Capital Market – APR Plc, case study

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RC NO: 649007


Benefits Accruable from The Capital Market – Cont’d.

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RC NO: 649007


VALUE PROPOSITION

RC NO: 649007


Thank You.

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