Days to its listing on the Nigerian Stock Exchange (NSE), Airtel Africa has disclosed its initial listing share price for Nigerian investors. The network operators’ share price will triple that of MTN Nigeria which listed in May 2019.
Airtel Africa’s share price has been pegged at between N363 and N454 per share. This put the company’s stock price far above MTN Nigeria which debuted with N90 on its first trading day. The South African company now trades at N130 on NSE. The price-earnings ratio of Airtel will perhaps indicate if the listing price is expensive or not. MTN listed at a price-earnings ratio of about 12x.
Note that the actual offer price is determined after the bid closure based on the demand generated in the process.
These are the qualified investors: There’s a condition for investors to access Airtel Africa’s shares on the NSE. According to the company, shares will only be offered to high net worth investors and institutional investors through book building.
Book building is a process used by companies to raise capital through public offerings, both initial public offers (IPOs) or follow-on public offers (FPOs), to aid price and demand discovery.
What this means: Only investors with $3 million or more in investable assets, not including the value of their primary residence, will be qualified to purchase Airtel Africa’s shares.
[READ ALSO: MTN’s listing: Should you buy, sell or wait and see?]
Listing on both the NSE and the London Stock Exchange will see Airtel float new shares of between 595.2 million to 744 million, raising a total £595 million, which is inclusive of an over-allotment option.
Airtel’s Market Cap: The telecoms group is pushing ahead for a target valuation of up to £3.6 billion, which implies an increase from £3.007 billion to £3.623 billion; excluding any option of over-allotment.
Why Airtel Africa is listing: The listing will enable the company to use the net proceeds of the offer to reduce debt as well as do the following:
- The listing on the exchange would provide access to the capital markets and diversification of the Group’s capital base to support its continued growth.
- The directors also believe that offering the shares in Nigeria and listing on the NSE would encourage operational discipline through the establishment of an independent capital structure and governance framework following the successful turnaround of the Group’s operations.
- It would introduce an optimal capital structure and enable improved leverage for greater flexibility in pursuing growth opportunities going forward.
Brokers of the shares: The issuing houses for the offer are Barclays Securities Nigeria and Quantum Zenith Securities Investments Limited.
Airtel Africa hinted July 4th as the commencement date for conditional dealings in its shares. It said the application had been made to the NSE for the Ordinary Shares to be admitted to the official list of the NSE.
At least 25% of the stock is expected to float freely immediately following the IPO.
Airtel Nigeria currently has 31 million subscribers, making them the second largest telecommunication company in Nigeria behind MTN Nigeria with 50 million users.
Just-in: FG kickstarts its 774,000 jobs SPW initiative as Buhari backs Keyamo
The initiative plans to employ 1,000 persons from each of the 774 LGA in the country.
Despite the opposition from members of the National Assembly, the Federal Government have formally kick-started the Special Public Works (SPW) programme, which was designed to create 774,000 jobs across the nation, with the inauguration of the State Selection Committees.
This was disclosed in a tweet post by the Federal Government on its official Twitter handle on Tuesday, July 14, 2020.
In the tweet post, the Federal Government said, ‘’The Special Public Works Programme of the Federal Government has kicked off nationwide. The State Selection Committees have been inaugurated and have commenced work. Find the names and contact details of members of your State’s Committee here.’’
The National Assembly had earlier called for the suspension of the programme, following disagreement and altercations with the Minister of State for Labour and Employment, Festus Keyamo, over the operations and processes of the programme.
The Special Public Works Programme of the Federal Government has kicked off nationwide. The State Selection Committees have been inaugurated and have commenced work. Find the names and contact details of members of your State’s Committee here: https://t.co/d7YjB49JeE #NigeriaSPW
— Government of Nigeria (@NigeriaGov) July 14, 2020
This programme, which is coordinated by the ministry of labour and employment, was part of the federal government’s intervention programmes and fiscal stimulus measures to help cushion the negative impact of the coronavirus pandemic on Nigerians.
The initiative which is expected to start on October 1, 2020, plans to employ 1,000 persons from each of the 774 local government areas in the country. Each of the beneficiaries of the programme will be paid N20,000 monthly to carry out public works.
The implementation agency for the programme is the National Directorate of Employment (NDE).
The Minister of State for Labour and Productivity, Festus Keyamo, while performing the virtual inauguration in a joint address with the Director-General of NDE, Nasir Ladan Argungu, disclosed that an inter-ministerial committee drawn from 8 ministries and headed by the NDE recommended the setting up of states’ selection committees to identify and recruit those to be engaged under the programme
It can be recalled that Keyamo, has been at loggerheads with the federal lawmakers over the implementation of the SPW programme. The lawmakers had insisted that the Minister must seek their inputs before going ahead with the constitution of the 20 man states selection committees. They also accused Keyamo of trying to hijack the programme from the NDE, who should be the implementation agency.
But the Minister, while appearing before a joint committee in the National Assembly accused the lawmakers of trying to hijack the process. He insisted that President Buhari gave him the mandate to directly supervise the programme and as such he is the only one that can ask him to stop.
More banks, insurance firms declare closed periods ahead of H1 results release
Insiders are prohibited from trading a company’s stock during a closed period.
Access Bank Plc, NPF Microfinance Bank Plc, Regency Assurance Plc, FBN Holdings Plc, AXA Mansard Insurance Plc, and Consolidated Hallmark Insurance Plc are among the latest financial services firms that have declared closed periods and announced board meetings, ahead of the release of their half-year 2020 earnings reports.
In a statement issued to the Nigerian Stock Exchange on July 13, 2020, Access Bank Plc informed its stakeholders that its closed period will commence today and last until twenty-four hours after the company’s audited interim financial statements for half-year 2020 has been released.
The tier-1 bank also announced that its directors will meet later this month (July 30th to be precise), to consider the financial statements as well as a proposed interim dividend payment to shareholders.
NPF Microfinance Bank Plc also notified stakeholders that its closed period began on July 13 and will last until twenty-four hours after the release of its Q2 2020 financial statement. In the meantime, the company’s directors will meet on July 28th to deliberate on the results ahead of release.
Board members of Regency Assurance Plc will meet on July 28 to consider the company’s Q2 2020 financial statements. The closed period started yesterday and will end one day after the Q2 report has been released.
As for FBN Holdings Plc, closed period started today July 14, 2020, even as the board members are scheduled to meet on July 29.
AXA Mansard Insurance Plc also notified the Nigerian Stock Exchange that its directors will also meet on July 29 to consider the company’s Q2 2020 unaudited financial statements. The company also sent a separate notice informing stakeholders about the commencement of its closed period starting from today July 14.
Lastly, Consolidated Hallmark Insurance Plc’s board will meet on the 29th of July to deliberate on some issues, including the company’s Q2 financial result. The company’s closed period started yesterday.
As Nairametrics explained in an earlier report, the board members of companies listed on the NSE typically meet to consider/approve financial statements before the release of such statements. In view of half-year 2020 results releases, most directors are scheduled to meet this month.
Meanwhile, between the time a company’s board of directors meet over their financial statements and the actual release of said financial statements, there is what is called “a closed period”. During this closed period, all persons with insider knowledge of the company’s affairs are prohibited from trading in the company’s stock.
Delivering mass housing as a path to Nigeria’s economic recovery
The mass housing strategy expects to create 1.8 million jobs.
In response to the challenges caused by the COVID-19 pandemic, President Muhammadu Buhari established the Economic Sustainability Committee (ESC) led by the Vice President; Yemi Osinbajo. The committee delivered the Nigerian Economic Sustainability Plan outlining objectives and key projects for various sectors, where a Mass Housing Programme expected to deliver up to 300,000 homes annually, plays a significant role. In February 2017, the government launched the Economic Recovery and Growth Plan (ERGP) which had similar objectives including stimulating the economy through affordable housing construction. In this scheme, the government had planned to construct 2,700 housing units in the short-term to create 105,000 direct jobs a year and gradually increase to 10,000 housing units per annum by 2020. However, these targets were not met.
Similar to the ERGP, the government is employing labour-intensive methods to stimulate the economy across fields such as agriculture, housing construction, food security, renewable energy, infrastructure, manufacturing and the digital economy to create jobs. The mass housing strategy expects to create 1.8 million jobs. The strategy will be rolled out in two phases; the first phase is aimed at easing bottlenecks in the delivery of social housing while the second phase will deliver affordable homes through direct government interventions in house construction.
The first phase plans to:
- Develop standardized home designs to streamline production costs.
- Target 100% local input for the construction of 400 homes in each Local Government Area.
- Engage with state governments to provide suitable land banks.
- Create a ‘Homes Warehouse’ to buy any completed homes from delivery partners, in the absence of ready off-takers.
- Mortgage or sell homes to the public through the Homes Warehouse.
- Encourage private sector involvement and facilitate the maturity of the mortgage market that will cater to the needs of middle-class Nigerians while the government addresses the needs of low-income earners and the poor.
- Give construction contracts with guaranteed off-take to a mix of established developers, small and medium scale contractors and consortiums of young professionals in the building sector.
The second phase plans to:
- Build 10,840 units of low, medium and high-income units across the six geopolitical zones.
- Build additional 12,008 houses under the Public Building and Housing Development Programme.
- Provide construction financing through the Federal Mortgage Bank for up to 2,667 housing units per year.
The mass housing programme has a timeline of 12 months and an estimated cost of ₦317,292,377,973.48. The Federal Ministry of Works and Housing, the Federal Mortgage Bank of Nigeria and the Federal Housing Authority are the government bodies to co-ordinate the delivery of this strategy.
According to the World Bank, Nigeria’s urban population is growing annually at 4.23% (2018) and its urban population accounts for 50% of its total population (2018). This surging urbanising rate largely caused by migration has increased demand for housing, and the inadequate supply of affordable housing explains its housing deficit.
Nigeria’s construction sector contributes about 4% to Nigeria’s GDP. It is a key employer of unskilled and semi-skilled workers and for every job created directly in construction, another job is most likely generated due to its strong linkages with other sectors of the economy such as manufacturing, transportation, banking among others. The Nigerian government understands the importance of this economic activity in fundamentally stimulating economic growth. Hence, the key involvement in its growth plans.
Family Homes Fund (FHF) was designed to be major players in supporting this objective with a target of building 2,000,000 housing units by 2020. However, according to their most recent portfolio data, only 3,484 units have been constructed since 2016. The fund has now revised its objective to put 500,000 families in homes by 2024 following the inauguration of a new board in September 2019.
The construction sector, which grew by 1.69% in Q1:2020 has the potential to spur economic growth during this period. Judging by their previous performance, it will be difficult to trust the government’s ability to follow through with their plans for the Mass Housing Programme.