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Capital market growth: Incentives necessary for listing companies - Expert
AS a move to finding a lasting solution to companies not listing on the Nigerian Stock Exchange (NSE), there is need for the later to come up with attractive incentives for companies seeking to list their shares on the stock market, Managing Director, Cowry Asset Management Limited, Mr Jonson Chukwu, has said.
He said the Exchange, as a self regulatory body must, as a matter of urgency, review its current listing and post listing requirements, even as it must create a mechanism that allows free entry of new companies into the Exchange and free exit of existing ones.
According to Chukwu who spoke in a chat with capital market reporters, for the Exchange to become a world class one, it must continue to develop the market in such a way that it would enable companies to embark on cross border listing.
He lamented that there was no company privately listed outside the country that was currently listed in the NSE, whereas Nigerian companies have been listing in other Exchanges of the world.
“Today, we don’t have any company that is privately listed outside the country that is listed in Nigeria, but our companies are going to list outside. We are only seeing cross border listing.
“Oando is presently listed in South Africa. The company decided to list in South Africa because of the benefits of listing there. We should develop our market in such a way that even foreign companies would have the need to be listed in our local market,” he said.
Chukwu, who disagreed with the notion that the delisting of some companies like the Nigerian Bottling Company (NBC) from the NSE would set a bad precedence for other multinationals listed on the NSE said, “Each issuer or company has its own corporate strategy. That NBC wants to remain a private limited liability company means that they may have several reasons for that. But that will not affect what happens to Nestle or Cadbury. The key thing is for us to continue to develop our market to accommodate cross border listing,” he said.
Chukwu explained that the major factor that compelled multinationals to exit from the market and inhibits new ones from being listed was pricing mechanisms.
He pointed out that pricing mechanisms on the NSE had become weak in the last three years, noting that most stocks had become undervalued such that they could no longer reflect the intrinsic worth.Share