Sustaining Calls for listing of Big Firms on NSE

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No doubt, the call for big firms operating in Nigeria to relinquish parts of their holding to the public by way of listing on the floor of Nigerian Stock Exchange (NSE) has continue to vibrate, because the static posture and body language of these companies that cut across all sector of the economy shows that they are not interested in the clamour.\r\nHowever, most worrisome is the fact that some of these establishments, particularly the multinationals are all listed in their home country Stock Exchanges, because there is a local law that makes its mandatory for such companies to be listed with its attendant benefits. In Nigeria, they have been hiding under the notion of market is a free entry and exist. \r\nThe other excuse they give is that they are not bound by the local law to list their shares, especially when they don’t have any need to raise money from the local market. Notwithstanding different reasons for their refusal to list, the fact that these companies do their business in Nigeria and record huge profit from here, wisdom demands that part of that profit should be shared among the indigenes of the land where they reap the profit. \r\nNo wonder, the call by the Speaker of the House of Representative, Honourable Yakubu Dogara, to initiate laws that will compel big firms in the country to list was seen as a welcome development by market watchers and notable participants. \r\nThe Speaker who expressed his concern, when he received members of the Nigeria United Kingdom Capital Market Project led by the President of Nigerian Stock Exchange Aig Aigboje Imoukhede and Sir Roger Gifford who was the head of UK team, Promised a legislative interventions to help resolve the situation, while expressing the need for a law to reverse the trend.\r\nThe Speaker stated that there was no justification for the failure of these big firms operating in the oil and gas and telecommunication industry to list on the Nigerian Stock Exchange. Honourable Dogara emphasized that big companies in the major sectors have to list on the capital market in order to create employment, deepen the market and make capital available for investors. \r\nHe said going forward, “the House may consider passing a law that will compel these companies to list certain percentage of their value on the stock exchange, Adding that apart from capital inflow sought, the market needs to be deepened, this is sad because these companies account for a huge percentage of revenues in oil, communication and energy etc”. \r\nThe speaker promised legislative interventions in all areas of value-added partnership aimed at wealth increase and redistribution, as well as the creation of employment and economic diversification.\r\nIndeed, since 2012 the NSE, management team led by Oscar Onyema has come up with initiatives that will enable some of these big firms to list on the Exchange. For instance, the listing rules of the exchange had been reviewed to make it easier for these companies to access capital market. NSE had also provided a legislation that covers incentives, unbundling of stringent eligibility requirements that create high barriers for potential entrants that hinder participation by willing businesses and adopting of options that promote foreign investment in the economy under terms that support national interest without exposing the market to the dangers of the past.\r\nStakeholders Views\r\nWith the changes going on in the global economic and more emphases on sustainability issues, stakeholders in the Nigerian capital market have thrown their weight on the need for these big companies to list their shares on the exchange. The immediate past President, Association of Stockbroking House of Nigeria (ASHON), Alhaji Rasheed Yussuf believed that the listing would enhance the country’s pension funds and leverage the number of investable stocks in the market.\r\nAccording to him, the effect of pension funds would be visible in the market through listing of multinationals companies such as MTN Nigeria Communication Ltd, Shell Petroleum Development Company, Globacom Nigeria Ltd and Airtel Nigeria Ltd, among others. Yussuf also said that most Pension Funds Administrators (PFAs) had reduced their exposure in the market since 2008, following global financial meltdown to minimize loss due to fewer blue chip companies that are in the market.\r\nOn his part, the former President, Chartered Institute of Stockbrokers (CIS), Mr Ariyo Olushekun, said that the government and market regulator needed to work together to ensure the listing of companies from major sectors of the economy on the exchange. He urged government at all levels to increase their participation in the market to boost investor confidence. According to him, the major task of the regulators should be how to woo government at all levels to participate actively in the market.\r\n\r\nProject Walking the Talk in 2016 \r\nDespite the few setback in attracting these companies to the NSE, it seems there are some flashes of light at the listing tunnel with the news that MTN Nigeria is planning to become a Public Liability Company (Plc) in 2016 by listing its shares on the floor of the NSE by way of public offer. \r\nSame applies to Arik Air, one of the largest Nigerian owned airlines, that plans to list by May 2016 as part of its management’s efforts to boost capital base and acquire more aircraft. Needless to mention Nigeria Mortgage Refinance Company (NMRC) that just listed N8 billion mortgage refinance bond and assured market operators of their intention to list their shares next year.\r\nThese among others, are pointer that the efforts of Federal Government, regulators and key stakeholders in the market may start yielding positive fruits in 2016. In addition Director General of the Securities and Exchange Commission (SEC), Mounir Gwarzo said recently that they are collaborating with the NSE, on the bases that, even though a company did not have to come and be listed in Nigeria that company can create notes and those notes can be listed on the NSE.\r\nThere is no gainsaying the fact that listings of these telecom, aviation giants, Consumer Goods, as well as Oil and Gas companies would shore up the liquidity of Nigerian capital market, which will in turn restore the much-needed investors\’ confidence.

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