In a bid to restore stability and liquidity in the nation’s equity market, a market analyst has called on the Nigerian Stock Exchange to lobby the federal government to push for mandatory listing of major government owned enterprises in the? power, energy, metallurgical and telecoms industries when privatised.
?
The Chief Executive Officer, Lamberth Trust& Investment Limited, Mr. David Adonri, who made the appeal at the weekend, said that revival of the equities primary market is a necessity if new listings are to be attracted by the Exchange.
?
Adonri noted that modification of the listing and post-listing requirements could align the Exchange with international best practices, thus encouraging more cross-border listings.
?
The analyst who lamented that the country missed the opportunity of compelling Telecoms companies to list on The NSE when Nigeria Communications Commission licenced them, said in attracting major private companies that occupy the commanding heights of the economy to list, the government must as a matter of necessity grant them fiscal incentives.
?
Adonri who said companies list their securities in Stock Markets for several reasons, but basically to have access to long term capital, explained that capital formation was the essence of an efficient stock market.
?
“New issues that facilitate capital formation take place in the primary market. Although new bond issues have in recent past inundated the primary market, new equity issues have virtually disappeared. New listings are essentially in pursuit of equity capital as against debt finance which companies can obtain easily from the money market. As a result, the incentive to list afresh is almost non-existent now. Revival of the equities primary market is a necessity if new listings are to be attracted by the NSE,” he said.
?
The NSE had earlier said that to salvage investment in the stock market from further depreciation, it would introduce new sets of requirements for companies seeking listing on the secondary segment of the Nigerian capital market.
?
The NSE’s Chief Executive Officer, Mr. Oscar Onyema, said that the new listing requirements was part of its commitment towards championing Nigeria’s and Africa’s economic growth and development.
?
He said the NSE has already commenced interaction with key stakeholders in the capital market on ways to develop rules and initiatives that would be beneficial to all stakeholders in the market.
?