The Nigerian Exchange Limited (NGX) has advocated for more government incentives to motivate companies to list on the NGX.
The NGX’s CEO, Temi Popoola, who made the call during an interview, explained that exploring the capital market would help the government to boost revenue and stimulate the sustainable economic growth required to increase wealth and reduce poverty in Nigeria. He said:
- “The reality is that because listed firms must adhere to regulatory requirements and corporate governance standards to maintain their listing on the Exchange, they are typically more consistent and reliable with their tax compliance. Consequently, the more companies we can get to list, the more revenue the government can make.”
Top priorities: Speaking on what the institution’s top priorities are for the year the CEO noted that the Exchange is looking to address some age-long issues bordering on new listings which will, in turn, deepen trade.
He recalled that in December 2022, the Securities Exchange Commission (SEC) approved NGX’s Technology Board rules which permit it to list fintech start-ups and tech companies on the Exchange.
- “In order to push its digital transformation agenda, NGX had gone one step further and established an advisory panel on digital technology products. The Panel would give the Exchange a platform to communicate with the capital market community and the fintech ecosystem to enhance and increase NGX’s digital product offerings.
- “We are interested in expanding beyond financial services, the construction industry and Telco. For instance, NGX admitted the first-Generation power company, Geregu Power Plc on the Exchange in 2022 and BUA foods which led to the deepening of the market and a fair representation of GDP. The Agric industry is one sector that has been often said to be underrepresented on the Exchange. As we move to get such listings, we are also looking for companies and sectors with low representation in order to promote a market with equal representation.”
Free zone companies: In a bid to diversify, Popoola also mentioned an interest in exploring listings from free zone companies like the listing of the second tranche of the Lagos Free Zone N25 billion series 2 bonds, the first 20-year corporate infrastructure bond in Nigeria on the Exchange.
Whilst citing ongoing projects within the Lagos Free Zone which were projected to generate $461 billion in the next five decades, he added that NGX in partnership with regulators will be taking steps to accommodate more listings from free zones in 2023.
- “Futuristically, we are looking at promoting financial literacy by exploring data dissemination through telco partnerships. We are also keen on aligning our activities to drive the UN SDGs and more importantly to promote the work we are doing in enabling a sustainable capital market ecosystem,” he said.
The fact that companies must comply to rules is an incentive to delist. What has the Exchange done to fight for listed companies the way MAN, NACCIMA, NECA and other OPS present common fronts to influence government policies. Is it not labouring in vain for the exchange to the exchange to be telling government to compel or encourage listing on an exchange. Commercial paper has turned out to be toast of investors. Existing listed companies are seeking ways to exit. We need the result of the Purple IPO to dimension the current state of health of the market. With MPR at 17.5%, it is not a bad idea to consider flight to safety to fixed deposit account, FGN bonds, CPs instead of a risky and inefficient equity market. How many equities can conveniently give a return of 8%. Secondly, why would the price of NGX plc be higher than Access Bank not to talk of Zenith and GTCo if not for
market manipulations