ARIK,MTN,SAHARA GROUP TO LIST ON NIGERIAN BOURSE

In spite of the difficult times at the Nigerian stock exchange due to negative investors sentiment, respite seems to be coming its way and especially for Nigerian investors Arik Air, one of the largest Nigerian owned airlines, plans to list the carrier on the floor of the Nigerian Stock Exchange (NSE) by May 2016 as part of its management’s efforts to boost the airline’s capital base and acquire even more aircraft. Also, MTN Nigeria is planning to become a Public Liability Company (Plc) in 2016 by listing its shares on the floor of the Nigerian Stock Exchange by way of public offer for purchase by interested members of the investing public. Similarly, Sahara Group, a Nigerian energy company will be raising as much as $1.4 billion (N277billion) through a dual listing of its oil and gas unit on the London and Nigerian Stock Exchanges, along with a debut dollar bond sale. With the current market liquidity largely skewed towards the banks and a few largely capitalised non-financial institutions which meet investors’ need, market watchers see more worthy listings like these (MTN, Arik and Sahara Group) which cross different sectors of the economy as one that can improve liquidity in the market. “It is a welcome and positive development for the Nigerian market. The Nigerian market is too shallow for the size and potential opportunities in the economy. The current market structure breadth and depth do not appropriately reflect the economy and its prospects. Listing leading players in the telecoms, oil & gas and aviation sectors will partly correct this structural defect and broaden the market in depth,” Rasaq Abiola, head, investor relations, UBA plc said. “I believe liquidity and product offerings are a chicken and egg game; with each factor stimulating or driving the other. You will recall that Seplat’s IPO was oversubscribed, with impressive participation from both local and foreign investors. I believe names like Sahara and MTN will stimulate investor appetite, especially if the IPOs are appropriately priced. “You will agree that investing in a firm (especially equity) is not just on the merit of the strong fundamentals of the company, the price/valuation must also be right. So, you buy the right asset at the right price and at the right time. This is why we often say the stock of a good company is not necessarily a good investment because the valuation may be stretched already (that is the stock may be overvalued),” Abiola added.