By Dipo Olowookere
In May 2019, leading telecommunications firm in Africa, MTN Nigeria Communications Plc, finally listed its shares on the Nigerian Stock Exchange (NSE) after years of dragging.
The exercise was done through listing by introduction. However, it was not without controversies as the company was accused of deliberately hoarding the stocks to create an artificial scarcity at the market.
For some days, retail investors were unable to get hold of the ‘priced’ equities because holders of the stocks when it was listed at N90 per share refused to let go. This caused the share price to rise at the market.
Another issue that arose from the exercise was the allegation that the management of the exchange waived the listing rules for MTN Nigeria when it could not meet the requirements to be on the premium board.
At a point, the Economic and Financial Crimes Commission (EFCC) was reportedly called in to investigate the listing of MTN Nigeria stocks on the exchange.
In the long run, things were sorted out and the shares of MTN Nigeria because readily available at the stock market for retail investors to buy.
But in order not to witness a similar issue in the future, especially when a company lists its shares via introduction, the management of the exchange has taken a step to amend the listing requirements under the Rulebook of the Exchange also known as the issuers’ rules.
“To address concerns about availability of shares for trading on the day a company is listed by introduction, the exchange has decided to introduce a rule that will require issuers to make shares available for trading on the listing day,” a notice from the NSE on Thursday said.
“To this end, the proposed amendments to the listing requirements seek to provide a clearer description of listing by introduction, and impose an obligation on prospective issuers of equity securities-excluding public offerings, to make a reasonable volume of shares available for trading on the day of listing,” the exchange added in the circular signed by its Executive Director in charge of Regulation, Ms Tinuade Awe.
It noted that, “Another concern is the need for sufficient information about the issuer’s financial position on the day of listing, to give prospective investors a basis for trading in the issuer’s shares.
“Consequently, additional amendments are being proposed to ensure that Issuers provide their Information Memorandum or SEC-approved Prospectus, as well as their latest financial statements to the market by publishing same on their websites at least 48 hours before the listing, in order to enable investors to make informed investment decisions regarding the issuer.”
The NSE said it wants inputs from the investing community on the subject matter and would be “grateful to receive your comments not later than the close of business on Friday, May29, 2020.
“Your comments should be set forth in a WORD document attached to an electronic mail to Mr Oluwatoyin Adenugba, Head, Rules and Interpretation at the exchange at [email protected].”
Adedapo Adesanya