Regulators in the Nigerian capital market are expectant that the full automation of all the Initial Public Offerings (IPOs) in Nigeria will commence in early 2019.
Sources familiar with the situation confirmed that preparations for the electronic IPOs are currently underway, even as they specifically hinted February as the commencement date.
Ms Mary Uduk, the Acting Director-General of Nigeria’s Securities and Exchange Commission (SEC) is also quoted as saying that the Committee in charge of working out the modalities of the e-IPO will submit their report this November end.
After the Committee’s report, SEC will then issue the rules and regulations guiding the e-IPO ahead of its launch in Q1 2019, she said.
Understanding the e-IPO
Electronic IPO (or e-IPO) entails the automation of all new offers in the Nigerian capital market, such that investors can easily subscribe to and purchase new share offerings over the internet.
With this process, every new order for shares “will be matched and allotted electronically and directly to the investment accounts of the investors at the Central Securities and Clearing System (CSCS)” as well as other centres assigned for clearing purposes.
This method also expedites the process of owning new shares because investors can easily get an allotment for new shares as well as know the value of their new holdings all within the timeframe of a week. This is far better than the analogue process of doing this currently takes at least four months.
“Given where we are now and the process that we know, it may take us till first quarter next year to be ready for the e-IPO, but we are moving in the right direction.” -Anonymous Source
In the meantime, the President of the Stockbroking Houses of Nigeria (ASHON) Mr Patrick Ezeagu, said this is a good development because it will engender transparency and efficiency in the market.