… as market eyes dollar listings, increased pension allocation to stocks
Nigeria’s billionaire businessman Aliko Dangote will be listing his refinery and fertilizer companies on the Nigerian Exchange Limited. These companies are under Dangote Industries Group.
Umaru Kwairanga, Group Chairman, NGX Group, noted this during a closing-gong ceremony in honour of the Senate Committee on Capital Market and Institution’s visit to the NGX headquarters in Lagos.
He said, “As of last week, the president of Dangote assured me that the Dangote Refinery is going to be listed on this market very soon. He also said that apart from the refinery, he is going to list the fertiliser company (Dangote Fertiliser Limited). This is a commitment from the private sector. ”
Dangote Cement shares have outperformed all other equities this year with a return of about 138.5 percent this year.
These are even key players in the capital market called for legislative changes to revitalise the market, including policies enabling dollar-denominated transactions and measures attracting private companies to list. Increased pension allocation to equities and a reviewed Chartered Institute of Stockbrokers.
This was discussed during a visit by The Nigerian Senate’s Capital Market Committee, led by Senator Osita Izunaso, to key players.
The policies proposed are aimed to unlock investments, address foreign exchange challenges, and deepen the market.
The Committee visited Chartered Institute of Stockbrokers (CIS), Nigeria Exchange Group (NGX), CSCS, and FMDQ.
Kwairanga mentioned a few policies that the Senate Capital Markets Committee should take an active role in advocating for legislative changes that will further enhance the allure of listing on the capital market.
“I urge the Committee to consider policies enabling dollar-denominated transactions within the Nigerian capital market. Such measures would open doors for both foreign and Nigerian firms with dollar revenues to actively participate in our market, broadening the scope and appeal of our capital market on the global stage,” he said.
Temi Popoola, Ceo NGX, mentioned to the legislators that dollar listing on the capital market can solve FX challenges currently facing the country.
“ For example, with dollars and the ability of dollar listings on the exchange. You need to be aware that the NGX and the capital markets can solve many of the challenges that our nation has,”
“ One of them is FX. There is FX both in and outside this country. One of the ways you can mobilize that is through dollar listing exchange on the capital market,” he said.
The chairman of the group said that a specific recommendation would be to revisit the Private Companies Conversion and Listings Bill, a move that holds the promise of fostering more listings on our exchange and deepening the market.
The Private Companies Conversion and Listing Bill, 2013 was read for the second time in the House of Representatives in July 2014. The Bill seeks to compel the mandatory conversion (from private to public) and listing of all private companies that meet specified thresholds in all sectors of Nigeria.
The chairman also mentioned that the legislators can put up pension reforms that can propel the capital markets to new heights.
“By introducing regulations that promote increased allocation to the equities market within the pension sector, we can stimulate liquidity, facilitate infrastructure development, and enhance price discovery in the market,” the chairman said.
Lamido Yaguda, director general of Securities and Exchange Commision, mentioned that the foreign exchange policies of the central bank, fiscal policy stance of the government, is helping to restore confidence in the capital market.
“We are now beginning to see even the pension funds beginning to look again at the equity market,”
He said that for many years, a lot of them have substantially reduced their portfolios, their allocations to the equity market, because of what they perceive as the better relative value in fixed income than in equity.
Oluwole Adeosun, President of governing council Chartered Institute of Stock brokers pleaded to the senate committee on capital market to get the Chartered Institute of Securities and Investments of Nigeria (CISIN) bill passed by the incumbent President of the Country.
“It has become necessary to review the enabling Act after 32 years to give CIS the capacity to play its intended role seamlessly in today’s market, that a Bill for an Act to repeal the CIS Act of 1992 and replace it with a new enactment, the Chartered Institute of Securities and Investments of Nigeria (CISIN) Act was passed by the 9th Assembly Federal House of Representatives followed by the concurrence of the Senate,”
He mentioned that the bill had been forwarded to the president towards the end of the last administration and couldn’t be considered by the president before the May 29, 2023 transition date but was sent back in July last year for expedited reconsideration.
Izunaso, the chairman of the senate committee on capital markets, said that it’s looking to pass the bills discussed during the meeting and also encouraging companies to get listed on the Nigerian Exchange Limited
“Well, as far as we’re concerned, some of the bills have already passed the ninth assembly and just been brought back. it’s not going to take us more than two or three months to get them out. We’re going to allow them. Some are in the House of Representatives already, and we will wait for them to conclude and bring it to the senate for concurrence,” he said.