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NSE Admits N3.4trn Worth Of New Shares In 7 Months



Despite the volatility witnessed in the stock market, the Nigerian Stock Exchange (NSE) has admitted shares of 12 companies valued at N3.4 trillion in the first seven months of 2019.

The listing of the shares of MTN Nigeria (MTNN) and Airtel Africa significantly boosted the market capitalisation.

A review of the new equities that came to the NSE as at August 2, 2019 showed that Airtel Africa listed a total of 3.758 billion ordinary shares on July 9 at N363 per share on the NSE.

The exercise added N1.36 trillion to the market capitalisation of the Exchange. Fidson Healthcare carried out a supplementary listing of 586.36 million, valued at N2.345 billion, while Ellah Lakes listed shares worth N8.009 billion issued to Telluria Limited as consideration for the acquisition of the entire issued shares of the firm.

At its entry into the market, MTNN listed a total of 20.355 billion at N90 per share, making a capitalisation of N1.83 trillion, Mutual Benefits Assurance listed additional shares valued at N1.586 billion raised through rights issue, while Skyway Aviation Handling Company (SAHCOL) listed N6.294 billion new shares on the NSE.

Access Bank Plc listed shares valued at N58.012 billion, comprising 6.617 billion shares from its merger with Diamond Bank Plc and its N15 billion fixed rate senior unsecured Green Bonds due 2024.

Others are Lafarge Africa, Consolidated Hallmark Insurance, May & Baker Nigeria and Nigeria Mortgage Refinance Company, which listed shares valued at N89.212 billion, N734.5 million, N1.781 billion and N11 billion, respectively.

With the development, the companies can source for funds through different instruments under the primary market, especially right issues, a process where companies source for capital through its existing shareholders. The primary market is the part of the capital market which deals with the issuance of new securities and then sold to investors directly by the issuer.

The capital market plays a critical role in economic development by pooling domestic savings and mobilising foreign capital for productive long-term investment. In this way, it facilitates and promotes the process of economic growth in the country.

Stakeholders said that the inability of the Exchange to inspire primary market activities can be seen in the performance of the secondary market as illiquidity persists.

They said that the market was able to attract three new listing, Airtel Africa, MTNN and SACHOL, so far this year, which is an improvement in the primary market when compared to the last three years.

However, the Nigerian equities’ market has recorded a year-to-date loss of 11.81 per cent as at July 31, 2019 due to selling pressure heightened on weak market and economic fundamentals.

Also, the heightening insecurity situation in the country and weak earnings’ reports from quoted companies, have revealed the weak fundamentals of the economy which have fuelled the negative sentiments and outing in the period under review when several stocks suffered huge losses, as many hit a 52-week lows.

Analysts also noted that the decline seen in the market was a reflection of low confidence and liquidity in the market and the economy at large, as consumers’ confidence and stock prices continue to look downward.

The chief executive officer of NSE, Oscar Onyema, recently said that “to enhance our listing prospects, we have strengthened our government engagement efforts on privatisation and the listing of state-owned enterprises, and we expect to take advantage of opportunities within this space during the year.

“We also intend to maintain our collaborative efforts with public and private sectors’ stakeholders to advocate for market-friendly policies, and cater to infrastructure financing needs as well as other capital requirements necessary for sustainable economic growth. The Exchange intends to work with the private sector to catalyse the listing of more companies,” he said.

During MTNN listing, Onyema had said that it was a promising development in the country since the company was the first of the big four telecommunications firms to list its shares on the NSE.

According to him, “it serves as an example to other similarly situated companies and we encourage more of the telecommunication companies in Nigeria to explore the different opportunities for raising capital on the Exchange’s platform.

“We believe that increased participation of indigenous companies in the capital market will improve credibility, entrench good corporate governance, transparency and sustainability in these companies as well as increase investors’ confidence (both local and international),” he said.

The chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion, said that under the primary market, many listed companies explored the option of sourcing cheap funds through right issues.

He maintained that it was only when activities in the primary market were rejuvenated that the Nigerian capital market would be said to have started to breathe again.

Also, the managing director of HighCap Securities Limited, Mr. David Adonri, observed that the restoration of investors’ confidence in the secondary market would automatically lead to the revival of the primary market.

He stated that the listing of MTN Nigeria and Airtel Africa had boosted the market capitalisation despite the decline seen in the equities’ market. He added that several companies were waiting for the right time to access funds in the market to enable them record 100 per cent subscription.

The managing director of Dependable Securities Limited, Mr. Chineye Ayanwu, said that the secondary market determines what happens in the primary market.

“The primary market is hinged on the market rebounding, right now the value of most of the stocks is considered to be below their book values,” he added.




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