The Nigerian Exchange (NGX) Limited listed N1.324 trillion new issues of equities from three companies on its floor in 2022, LEADERSHIP learnt.
Under the new listing last year, BUA Foods listed by introduction 18 billion ordinary shares valued at N720 billion; Geregu Power (N250 billion); and Access Holdings (N353.68 billion).
Since capital is critical for business growth, companies can raise capital through debt or equity. Debt is issued in the form of bonds while equity is issued in the form of shares. When a company issues new bonds or common stock, it is referred to as a new issue.
The stock exchange, as an important component of the capital market, plays a significant role in the capital formation process because of the tremendous opportunities that ensue from its activities. The exchange is expected to mobilize long-term savings to finance long-term investment by providing risk capital in the form of equity or quasi-equity to entrepreneurs.
New issues are savings mobilized for investment purposes by companies and governments. The new issues market represents the primary arm of the capital market and shows how many financial resources are invested in long-term securities of corporate bodies and governments.
The listing of new issues in the market will deepen the market, improve liquidity and tradability of companies’ shares. Also, it will increase access to capital in order to fund companies’ future growth initiatives.
Speaking on this development, the director-general of Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, recently said, the commission has been implementing measures aimed at encouraging more listings by creating new rules and amending existing ones, improving general review processes, continuing engagements with issuers, advisers and other critical stakeholders.
Yuguda said, the commission and the Nigerian Exchange (NGX) Limited have moved to make the processes involved in listing more efficient and cost effective by streamlining the approval process between the SEC and the NGX.
Also, the CEO of NGX, Mr. Temi Popoola, said, the NGX would seek to consolidate its historic status with a new verve of digitisation by creating innovative and automated access to the market while ensuring overall quality of listed companies and ease of capital raising process.
According to him, the Exchange would deploy strategic initiatives to attract financial technology (Fintech) firms to the stock market, including launching of a Nasdaq-style board for the listing of tech companies.
The CEO of APT Securities & Funds Limited, Mallam Garba Kurfi, stated that, the listing of Geregu Power, Access Holdings and BUA Foods added N1.3 trillion to the market capitalisation of NGX, further boosting liquidity in the Nigerian capital market and providing opportunities for wealth creation.
The chief operating officer, InvestData Consulting Limited, Mr. Ambrose Omordion said: “the Nigerian Exchange provides access to long and medium terms finance for structured businesses. The Exchange is positioned to help multinational and local businesses and a wide range of investors gain an overriding view of the capital market as well as guide investors and businesses in making wise investment and finance choices.”
He however noted that, “the present market fragmentation is not the best for our market; we need to have a standardized market where we have companies from across the sectors of the economy listed so that no one firm or few firms will be domineering and dictating the movement of the market as we currently experience.”
He added that, “the listing of BUA Foods and Geregu Power were a welcome development on the market. The government and the market regulators should encourage companies to list and participate.
“Making the right policies to drive economic growth and encourage small businesses to list by reducing cost of listing and post listing requirements are key to addressing this issue.”
The chairman, Geregu Power, Mr Femi Otedola, stated that, the listing of the company was the actualisation of a vision to bring world-class standards in governance, sustainability, and business processes to the Company and the Nigerian electricity sector.
He added that listing on the Main Board of NGX would ensure that the long-term growth of the company is assured and its benefits would be passed on to their shareholders.
Chairman of BUA Group, Abdul Samad Rabiu stated that, “I am delighted that yet another member of BUA Group has been listed on the NGX. This shows our commitment to national economic growth and support for the food security drive of the nation in alignment with global sustainability goals.
“We appreciate the continued support of our stakeholder’s financial advisers, stock brokers, suppliers, customers, consumers and members of staff. In particular, we cherish our host communities with whom we continue to entrench very strong and mutually beneficial relationships.”
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