Nigeria’s IPO Market Records Increased Interest

More companies are lining up to list on the Lagos stock exchange, kick starting Nigeria’s IPO market after a long drought.

Sources familiar with matter said two companies – Skyway Aviation Handling Company (SAHCOL) and Nigerian Reinsurance Corporation – were preparing for initial public offerings this year, while Singapore-owned Indorama Eleme Petrochemicals Ltd planned a public float in Lagos next year.

IPOs dried up in Nigeria after a 2008 crash, aggravated by the global financial crisis, wiped more than 60 percent off the stock market’s capitalization. The benchmark share index has since recovered, gaining 42 percent last year but IPOs have yet to resume, apart from oil company Seplat’s dual listing in Lagos and London in 2014.

SAHCOL is going through the regulatory process ahead of a planned IPO in August when core investors will sell a stake, while Nigerian Reinsurance aims for an IPO in November in which the government will sell part of its stake, the sources said.

“I’m expecting more transactions out of Africa in the equity markets, both in Nigeria and across Africa,” Miguel Azevedo, Citibank’s managing director and head of investment banking, Middle East and Africa, said.

“I think at the end of the year we will see that 2018 was the biggest year for African IPOs since the financial crisis.”

Alex Okoh, director general of the Bureau of Public Enterprises, said the government has 11 assets it plans to either concession or sell to strategic investors this year, ranging from power assets to sports stadiums.

Read more: Nasdaq

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