Bourse CEO Oscar Onyema told the Reuters Africa Investment Summit in Lagos that a return of confidence in the market from domestic investors burned by a 2009 financial crisis had reversed the trend of foreigners holding most Nigerian shares.
Domestic investors now accounted for 59 percent of holdings, on the NSE, against 45 percent at the end of last year, he said.
"We cannot announce which ones yet but they are ... in the top ten in the world," Onyema said of the banks that had filed applications to trade on the NSE.
Citibank (C.N) and JP Morgan (JPM_pd.N) both have a presence in Nigeria, but do not trade shares on the NSE, which is currently dominated largely by small local stock brokers.
Rencap (RNCG.PK) and Standard Bank (SBKJ.J) both already have traders operating on the bourse floor.
Before the stock market bubble burst in 2008, wiping nearly two thirds off its value in a year, domestic investors owned 85 percent of shares, with foreigners owning the rest.
That ratio had fallen to 43 percent domestic against 67 percent foreign by the end of 2011.
"I don't believe confidence has fully returned, but a great deal of confidence is back," Onyema said.
"Local investors are coming back to the market in droves, especially the institutional investors," he said.
Africa's second biggest bourse has made a series of sweeping reforms since it emerged from the 2009 financial crisis that nearly saw nine banks go under. These have included tighter regulations, introducing a new trading technology platform, bringing in market makers and allowing short selling.
The new platform using Nasdaq (NDAQ.O) technology would be ready to go online by the third quarter of this year, he said.
The bourse last year introduced its first exchange traded fund (ETF) and its first retail bond index, and Onyema said it aimed to enable depository receipts to be listed in Nigeria this year, and to start trading derivative products in 2014.
"All of these things have the effect of driving liquidity," Onyema said, adding that trading volumes had returned to an $26 million a day on average by the first quarter of 2013, compared with $17 million a day last year -- though still well below the $100 million a day before the bubble burst.
Several IPOs and an equity ETF were in the pipeline, he said, but he declined to give details.
The bourse remains a long way off from its target of $1 trillion dollar valuation by 2016 -- the capitalization of the bourse is currently just over $100 billion.
"We're not moving as quickly as I'd like to see ... We need significant changes in government policy," He said.
He urged the government to give tax breaks to firms that list on the stock exchange. Currently a lot of companies were electing to stay private so that they do not have to disclose their profits and pay high rates of corporate tax, he said.