The jinx of listing of new shares by fresh companies on the platform of the Nigerian Stock Exchange appears to be disappearing as more companies are beginning to express confidence in doing business on the bourse by listing their shares. Most recently was the listing of an aviation handling company’s initial public offer which boosted the capitalisation of the market by over N6 billion. More companies are on the waiting list to further increase the depth of the bourse with the listing of their shares in the days ahead. Bamidele Famoofo reports
In the last three years, the revival of listing of new shares on the floor of the Nigerian Stock Exchange has begun, putting an end to the drought the market has experienced since 2008 after a major global financial crisis took its toll on business in the stock market.
To be specific the turnaround came in 2016, when the NSE welcomed the offer The Initiates Plc to list 889,981,552 ordinary shares by introduction on the Alternative Securities Market (ASeM) Board. The Initiates Plc, by that action, became the first waste management company to be listed on the exchange.
In January 2017, NSE listed by introduction 9.75billion ordinary shares of Med-View Airline on its main board. Med-View Airline Plc is one of Nigeria’s foremost airlines, airlifting more than three million passengers and 46million tonnes of cargo (annually) to 14 local, regional and international destinations, including London, Accra, Jeddah, Abuja, and Lagos amongst others.
Barely a month after Med-View Airline came on board, a financial institution joined the league. Jaiz Bank Plc, Nigeria’s first non-interest bank, listed ordinary shares of N29, 464,249,300 of 50kobo each at N1.25 per share on the exchange on Thursday, February 9, 2017, by introduction.
Also, the exchange on Monday, November 27, 2017, listed by introduction, 800 million ordinary shares of Global Spectrum Energy Services Plc at N5 Per Share on its main board. Global Spectrum Energy Services Plcis an integrated oil & gas offshore support vessel services company operating in key oil and gas producing areas in West Africa.
Then in August 2018, Notore Chemical Industries Plc opened the door of listings as the foremost Nigeria Fertiliser Company joined the club of quoted companies as it listed its entire paid-up share capital on the Nigerian Stock Exchange. A total of 1.612 billion ordinary shares was listed. Notore, a vertically integrated agro-allied, chemical and power group based in Onne, Rivers State, has six subsidiaries including Notore Supply & Trading Mauritius Limited, Notore Power Limited, Notore Seeds Limited, Notore Foods Limited and Notore Industrial City Limited.
The most recent on the list and perhaps, one of the most celebrated was the coming of board Skyway Aviation Handling Company Plc (SAHCOL Plc) to increase the number of issuing companies on the exchange.
SAHCOL Plc is the first company under the Bureau of Public Enterprises (BPE) privatisation programme to successfully finalise an initial public offering and list its shares on a securities exchange. The company is a full-scale aviation ground handling service provider with a focus on aircraft/ramp handling, cargo handling passenger handling, premium lounge, aviation security and baggage reconciliation.
SAHCOL Plc, which is competitor to NAHCO Plc listed1,353,580,000 ordinary shares at N4.65 per share by way of an Initial Public Offering (IPO) on the main board of NSE on Tuesday, April 23, 2019.
“The listing of SAHCO added N6.29billion to the market capitalisation of the exchange, further deepening the Nigerian capital market. This listing marks a return to listing by way of IPO following Transcorp Hotels IPO listing in 2015. The long break of IPO listing at the local bourse followed the 2008 global financial crisis,” said Chief Executive Officer of NSE, Mr. Oscar Onyema.
In her welcome remarks, the Executive Director, Regulation, NSE, Ms Tinuade Awe, commended SAHCO Plc for taking the bold step to list on the exchange. “We are particularly pleased that SAHCO Plc has taken this strategic step to join the main board of the exchange and in so doing, the prestigious club of quoted companies in Nigeria. This step indicates the firm’s belief that our platform remains a veritable avenue for raising capital and enabling sustainable national growth. I commend SAHCO Plc for this bold and strategic step, which will not only showcase the company as an established player in the Aviation sector, but will enable the firm to actualise its strategic vision of becoming the leading provider of passenger, Ramp and Cargo Handling Services in the West African sub-region.”
Awe, also stated that the exchange encourages other privatised state-owned enterprises to explore the different opportunities in the capital markets for raising long term capital.
SAHCO was incorporated as a private limited liability company under the name Skyway Aviation Handling Company Limited on 22nd April 2009. The company is a member of the Sifax Group. In 2009, the Sifax Group, through SAHCO, acquired the Federal Government’s 100 per cent equity stake in Skypower, an aviation ground handling services entity, under the privatisation programme of the federal government. Following the acquisition, Skypower became a wholly-owned subsidiary of SAHCO, with its operations taken on by the company.
More companies are expected to join the train in the months ahead. For instance, MTN Nigeria Communications Plc has announced that it had completed its conversion from a private company to a public company. The company said the conversion to a public liability company is a legal requirement and key milestone in the preparatory process for MTN’s listing by introduction on NSE.
A source from MTN said the intended listing on the NSE will create a new telecoms asset class for investors and provide a wider group of Nigerians with a chance to participate in the MTN investment opportunity.
Speaking on the announcement, the MTN CEO, Mr. Ferdi Moolman, commented: “Our conversion to a Plc is a major step towards listing by introduction on the Nigerian Stock Exchange in the first half of 2019. It is a reaffirmation of our long-term commitment to expanding investment opportunities for Nigerians, in addition to providing everyday services to them. We look forward to continuing our engagement with the SEC and NSE to take forward the listing process.”
In March this year, MTN announced its earnings for the 2018 financial year, recording growth above inflation in full service revenue at 17.2 per cent and the addition of nearly six million new subscribers to the network. The company announced earnings before interest, taxes, depreciation and amortisation (EBITDA) of N453.1 billion and expanded EBITDA margins to 43.6 percent(excluding the CBN resolution amount). The company added 4.5 million active data customers during the year, delivering data revenue growth of 39.3 percent and expanding to 18.7 million the number of people that it connects to the possibilities that the internet provides.
“Nigeria is one of the largest markets within MTN’s portfolio and central to its growth strategy. The upcoming listing is a key milestone for the MTN group and is part of its commitment to localisation in the markets in which it operates,” a statement from MTN said.
Analysts believe that the overall weak macroeconomic scenario, the sustained negative market sentiments within the period, coupled with other factors such as falling oil prices, and the tension in the socio-political space, did not encourage successful primary market activities.
Meanwhile, the NSE has retooled itself in many ways to remain an attractive destination for issuers. It has built a more responsive market by deploying cutting-edge technology for trading and reducing market infractions through improved market monitoring and surveillance via the use of artificial intelligence. The exchange has also developed a market structure that has introduced upscale securities listings such as the first ever Sovereign Green Bond (FGN Green Bonds) in an emerging market and the FGN savings bond, which democratised participation in fixed income securities. Investors have also been provided with better visibility into listed companies as the exchange introduced the Corporate Governance Rating System (CGRS) and CG index, while providing protection by way of the Investors Protection Fund.
The NSE is in the process of introducing e-IPO platform, which will help boost market participation and enhance liquidity in the market. This platform, according to market sources, will enable seamless and efficient public offering subscription.