By Babajide Komolafe
Securities and Exchange Commission (SEC) has recommended to the federal government that the privatized power companies be made to list their shares on the Nigeria Stock Exchange.
Director-General, SEC, Ms. Arumah Oteh said this at the 18th Nigeria Economic Summit, during the financial regulators forum. She said the listing of the companies will allow Nigerians to participate in the wealth created by the companies and also enhance corporate governance in the management of their affairs.
She stated this while highlighting efforts of the Commission to encourage telecommunication companies and SMEs to lists on the Exchange.
She said, “those in Stock Exchange and SEC believes that it makes great business sense for large companies to list, it enhances their brand and it creates effrontery for their product and the example that I like to give is whenever people threatens that they will blow up the base station of a telecoms company, if someone owns the share of that company, that person could actually decide to protect it.
“So we believe that there is great business reason why large companies telecoms, oil and gas and others companies should list. To us it is unfortunate that as we stand today the stock market basically represent 17 per cent of the economy but we feel that some of what is been done today in agriculture should change that.
“In agriculture we have a few listed companies that focus on agriculture, some of them are conglomerates like PZ and Nestle and others but two specialized companies come to mind Presco and Okomo and they have done very well this year in terms of their performance. So there are clearly good opportunities for those who are building agro based system to come to the market.
“When I listened to the agriculture Minister talk about what happened in cassava, that we are exporting them for eternal to China, those companies should be queuing up asking us about how to grow their business because I am sure it is not just China looking for eternal from Nigeria.
“When he mentioned that within one year we have thirteen rice mill in Nigeria and that his plan is that by January 2015 we would have 100 rice mill, we expect that those companies will seek medium to long term finance in the bond market or the capital market.
“We also have been actively proposing to the federal government, that as we privatize power, that those companies should list as quickly as possible on the stock exchange for two reasons; I think some of what we have learnt from telecoms companies not listing early enough, should not happened with the power companies.
“Part of financial inclusion is democratizing participation in the capital market so that more Nigerians can create wealth. But we think even more important is the issue corporate governance, there is clearly more transparent and accountability when companies are listed on the Nigerian stock exchange.”