There are strong indications that the Nigerian Stock Exchange (NSE) will welcome four more companies to its trading floor in the next 19 months.
Since the 2008 global market meltdown, the local bourse has not had any firm listing its shares via Initial Public Offering (IPO) apart from Seplat, which had its in 2014.
The 2008 market crisis saw Nigerian stock market losing over 60 percent of its capitalisation, a development some investors are yet to recover from.
Since then, some investors have been very careful of the stock market, preferring to watch from afar.
But MTN Nigeria is expected to open the floodgate with its planned listing this year. In fact, there are reports that this would happen later this month or next month. Worst still, the public offer will happen before the end of this year. This IPO is believed to worth $500 million.
A report by Reuters has revealed that apart from MTN Nigeria’s IPO this year, three other firms are making efforts to publicly quote their companies.
According to the report, “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.”
It was said that at the moment, 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.
“I’m expecting more transactions out of Africa in the equity markets, both in Nigeria and across Africa,” Reuters quoted Miguel Azevedo, Citibank’s managing director and head of investment banking, Middle East and Africa, as saying.
“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.
The NSE rose 16 percent in the first quarter, helped by rising oil prices, but has recently seen a sell off and is down 0.4 percent year to date as rising US interest rates hit emerging markets and due to political risk ahead of a presidential election next February.
Business Post reports that in 2017, the Nigeria stock market was one of the top five performing markets in the globe, growing by over 40 percent.