Operators seek speedy listing of privatised firms, multinationals
Capital market operators have renewed the call for relevant authorities to expedite action to list privatised companies on the Exchange, stating that the listing of 10 new companies on the Nigerian Exchange Limited (NGX) within five years added N6.08 trillion to the market capitalisation.
According to them, the listing, which took place between 2018 and 2022 has provided access to capital for Nigerian and international companies, from small-cap and growth-oriented companies to more established businesses looking to utilise the capital market to fund their businesses and expansion strategies.
They pointed out that listing of other telecommunications, oil and gas firms to further boost liquidity in the Nigerian capital market, provides opportunities for wealth creation and increases the visibility of the companies to investors on the African continent and across the globe.
An independent investor, Amaechi Egbo said there was no justification for the multinational oil and gas, and telecommunication companies not to list on the Exchange.
He noted that the listing of such companies will create employment opportunities, deepen the market, and make more capital available for investors.
He said: “Apart from the capital inflow, the market needs to be deepened, as most of the big international companies in Nigeria are not participating in the NGX. This is sad because these companies account for a huge percentage of revenues in oil, communication, and energy.”
Egbo argued that the present privatisation legal framework is such that would make government long-term economic development a mirage.
According to him, experiences from successful privatisation exercises in other countries afforded their citizens opportunities to benefit in the transformation of the commonwealth of the enterprises.
He stressed that sustained growth and expansion of the nation’s employment space would remain elusive without making privatisation an all-inclusive programme.
The Chief Executive Officer of APT Securities & Funds Limited, Mallam Garba Kurfi said one of the major success stories of the present administration was to convince MTN Nigeria to get listed on the Exchange.
He noted “For bringing MTN Nigeria to the capital market, it attracted Airtel Africa to list on the Nigerian Exchange. Now, we have BUA Foods and BUA Cement listed in the exchange.”
“These four companies constitute about 50 per cent of market capitalisation. We hope Nigerian National Petroleum Corporation (NNPC) since it is now a limited liability company will be listed too.
“Buhari has signed the Petroleum Industry Act (PIA) bill that took us 18 years into law and I wish NNPC will be listed also. They promised two years and one year for NNPC to be listed on the NGX. We anticipated that the refineries, Nigeria LNG Ltd (NLNG), among others are quoted.”
Chief operating officer, InvestData Consulting Limited, Ambrose Omoriodon stated that the exchange provides access to long and medium terms finance for structured businesses and is well-positioned to help multinational, local businesses and a wide range of investors gain an overriding view of the capital market.
Additionally, he pointed out that the nation’s bourse also serves as a guide to investors and businesses in making wise investment and finance choices.
However, he noted that the present market fragmentation where one firm or few firms will be dominating and dictating the movement of the market as currently experienced is not the best for the market.
“We need to have a standardised market where we have companies from across the sectors of the economy listed so that no one firm or few firms will be domineering and dictating the movement of the market as we currently experience.”
He added, “The listing of MTN Airtel Africa, Airtel Africa and BUA Cement was a welcome development that reduced Dangote Cement’s dominance and control. The government and the market regulators should encourage companies to list and participate.
“Making the right policies to drive economic growth and encourage small businesses to list by reducing the cost of listing and post-listing requirements are key to addressing this issue.”
Data obtained from the NGX showed that 10 new companies were listed in the period under review. In 2018, Notore Chemical Industries Plc listed 1.61 billion ordinary shares of 50 kobo each at N62.50 per share, which amounted to N100.75 billion capitalisation.
The NGX admitted N6.29 billion of Skyway Aviation Handling Company shares, N1.83 trillion shares of MTN Nigeria Communications (MTNN) and N1.36 trillion of Airtel Africa shares on its trading platform in 2019, while N1.18 trillion shares of BUA Cement listed on NGX in 2020.
In 2021, N840.260 billion shares of Guaranty Trust Holding Company (GTCO), N7.371 billion shares of Ronchess Global Resources, N34.861 billion of Nigerian Exchange Group and N62.6 million of Bricklinks Africa shares were listed on NGX, while in 2022 so far, BUA Foods listed N720 billion shares on NGX.
The listing of the 10 companies has further boosted liquidity in the Nigerian capital market and provided opportunities for wealth creation. Also, the listings have increased the visibility of the companies to investors on the African continent and across the globe.
The Nigerian Exchange (NGX) at the beginning of the year said it would focus on five major areas in the year as the Exchange seeks to deepen access and attract a new generation of investors to the market.
The Chief Executive Officer of NGX, Temi Popoola, said the Exchange would drive its growth in 2022 by focusing on five strategic areas, including building on digital transformation, listings and delistings, technology, partnerships and sustainability.