AS the set time for the actualisation of the Nigerian Stock Exchange, NSE, $1 trillion market capitalisation approaches, capital market operators have advised the management of the Exchange to intensify efforts of wooing companies in the upstream and downstream oil and gas and telecommunication sectors to list.

They also empahsised the need to encourage mid-sized companies to access the capital market for funding as this remains one of the key drivers of volume in the market.

Speaking, Johnson Chukwu, Managing Director/CEO, Cowry Asset Management Limited, said that a clear example of the possible impact of listing by companies in the oil & gas, telcom sectors is the planned initial public offer, IPO, of $500million by Seplat, a Nigerian upstream oil company and dual listing in both the Nigerian Stock Exchange and London Stock Exchange.

“The listing of Seplat, which currently produces about 60,000 barrels per day, on the NSE will increase the market capitalszaion by more than $2 billion.

It can only be been imagined the capitalisation of the likes of Shell Petroleum Development Company (SPDC), Mobil Nigeria, Chevron, whose daily production is more than 200,000 barrels each. This is not to mention the capitalisation of the telco majors like MTN, Glo, Etisalat and Airtel,” Chukwu said.

Also speaking, Mr. Diekola Onaolapo, Managing Director/CEO, Eczellon Capital Limited, said it is important to tweak either of the two variables that constitute the market capitalisation of the Exchange – outstanding shares (volumes) and the market value – if the dream of achieving a $1 trillion capitalisation should be realised.

Market capitalisation

He said, “The market capitalisation of an exchange is the sum total of all quoted companies and other instruments on the exchange. The equities market capitalisation is made up of two variables- the outstanding shares (volumes) and the market value. In order to push towards $1 trillion, either or both of the variables, have to be tweaked directly or indirectly.”

“To further drive volume, a key driver will be the encouragement of mid-sized companies to access the capital market for funding. The establishment of Alternative Securities Market (ASem) by the NSE is a welcome initiative in this regard.

“Overall, the investor education project by NSE and the Securities and Exchange Commission, SEC, will also play a large role in enlightening the public on the bountiful opportunities in capital market investments,” Onaolapo added.

He observed that the drive by the NSE to get more companies especially the telecoms, power companies and energy companies to list on the Exchange will lead to a quantum leap in the capitalisation currently valued at $76 billion, even as he added that the introduction of Exchange Traded Funds (ETFs), futures, options and other instruments will deepen the market, thereby bringing the target within reach.

Furthermore, the Eczellon chief executive commended the initiative by both the SEC and NSE in areas of corporate governance, effective dispute resolution and the use of technology for monitor and control.

Highlighting the importance of increasing local investors’ participation in the market, he noted that there is need to build trust in investors, saying that bulk of the responsibility lies with the market regulators as they are saddled with the principal task of protecting investors and developing the market.

It will be recalled that the NSE had set a target of $1 trillion market capitalisation in 2016, hinging its optimism on a number of variables, which include increasing the depth of the stock market through listing of spin-off companies from Power Holding Company of Nigeria, PHCN, on privatisation of the later, listing by upstream and downstream oil and gas companies that have minimal representation at the moment and introduction of more products by NSE among others.


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