The Nigerian stock exchange (NSE), at the 9th annual Pan-Africa investor conference by Renaissance Capital yesterday, Wednesday 16 May 2018 said apart from the much anticipated MTN Nigeria Initial Public Offering (IPO), the exchange is in early talk with Skyway Aviation Handling Company Limited (SAHCOL) and some Fintech companies to get them listed on the bourse.
The NSE said the move is part of the exchanges commitment towards deepening the Nigerian capital market by providing enough liquidity.
“Apart from the fact that we are working closely to see that the MTN Nigeria listing be successful, we have also started having some engagement with SAHCOL and a Fintech company to ensure that we bring the companies to the market,”Tinuade Awe, Executive Director at the NSE told BusinessDay.
“In our talk with a Fintech company which I am not at liberty to disclose the name at this time, we are creating something we call the growth board and the idea of this board is to have these kinds of companies that may not yet be where they need to be organisationally but we are working with them so they can be able to come to the market,” Awe added.
Last year, MTN group announced that its Nigerian unit will be listed on the Nigerian stock exchange following a compulsory fine that was slammed on telecoms giant.
The group said they have made good progress on the IPO processes in Nigeria, and they aim to conclude it in 2018.
As for when the Nigeria MTN IPO will commence a source that preferred to remain anonymous because of the sensitivity of the matter disclosed to Business Day that the listing would happen in 2-3 months’ time.
According to a valuation carried out by BusinessDay Research and Intelligence Unit (BRIU), MTN Nigeria is forecast to have values ranging from $8.56 billion to $10.88 billion when listed.
BRIU used various valuation methodologies including the discounted cash flow (DCF) and relative peer valuation.
Analysts who also spoke to BusinessDay all anonymously said that MTN share sale will go a long way in deepening the Nigerian financial market especially since the market has not recorded any initial public offers for two years since the January 2015 listing that saw the birth of Transcorp.
Awe said the NSE is very excited about the possibility of retail participating in the IPO, as participants will be able to transact through the use of their mobile phone.
The exchange is also working with the Nigerian Communication Commission to enable the use of Unstructured Supplementary Service Data (USSD) so as to make the platform a robust one.
“MTN has expressed publicly an interest to list this year and what I can tell you is that Nigerians are able, willing and ready to list the company this year. If MTN does not list, it will not be because of the Nigerian stock exchange as we are working on an electronic IPO platform that will ensure that the 150 million subscribers it has in the eco space, actively participate in the MTN listing,” Awe said.
“The idea is basically to give retail participants who were broken in the mid 2000 a taste of the fact that the market is still there, as some of them have already started coming back but this will be an opportunity to get a lot of them back at the same time,” Awe said in an exclusive interview with BusinessDay.
According to her, the exchange is working hand in glove with some private equity firms so as to expand the number of asset classes, and the number of listed firms that will help give investors varieties to invest in.
“We engage with PE firms because we see that private equity firms have an exit strategy. Rather than selling to another private firm, you can exit through the market and get better price discovery.”
The Managing Director of Ghana stock exchange Ekow Afedzie, who was also present, said beyond the MTN Ghana listing, the exchange has also been in talks with several banks and right issues which might likely come to play in no distance time especially since the economy is on the right part of growth and development.
“These are exciting times for Ghana economy, our GDP was over eight percent last year, interest rates are going down drastically, inflation is single digit, and in terms of economy we are doing financially well.
“Our main equity market is up, our alternative and bond market is doing pretty well, in terms of listings we are going to have 2-3 IPO coming in this, which is going to change the landscape of our market,” Afedzie said.
Temi Popoola, CEO, Renaissance Capital said Nigeria remains a key market.
“Elections are coming but by and large, as we say it is business as usual,” Popoola said.
On recent sell off in emerging markets, RenCaps global chief economist said:
“There is emerging market crisis going on currently, and there is worry over this crisis in emerging markets, we have seen US 10 years treasury yields hits 3 percent, Argentina currency sell off dramatically, we have seen turkey under a lot of pressure, and Nigeria has not been affected at all, resulting from the fact that the country does not have current account deficit owing to rising oil prices, the FX window and this is notwithstanding the country still has double digit interest rates ,” Charles Robertson, the Global Chief Economist at Renaissance Capital said at the conference in Lagos.
Endurance Okafor, Micheal Ani & Bunmi Bailey