Economy
Report Identifies Nigerian Stock Market for Capital Raising in 2018
By Dipo Olowookere
A new report by Johannesburg’s Baker McKenzie has identified Lagos, the commercial capital of Nigeria, as a must watch market for capital raising in 2018.
According to Baker McKenzie’s Cross-Border Index, investors should turn to the local bourse for capital raising after many years of not having an Initial Public Offering (IPO) at the Nigerian Stock Exchange (NSE).
“More companies are lining up to list on the Lagos stock exchange, kick starting Nigeria’s IPO market after a long drought,” Head of the Capital Markets Group at Baker McKenzie in Johannesburg, Mr Wildu du Plessis, said.
He stated that sources familiar with the matter said that two companies – Skyway Aviation Handling Company (SAHCOL) and Nigerian Reinsurance Corporation – were preparing for initial public offerings this year, while Singapore-owned Indorama Eleme Petrochemicals Ltd planned a public float in Lagos next year.
“IPOs dried up in Nigeria after a 2008 crash, aggravated by the global financial crisis, wiped more than 60 percent off the stock market’s capitalization. The benchmark share index has since recovered, gaining 42 percent last year but IPOs have yet to resume, apart from oil company Seplat’s dual listing in Lagos and London in 2014,” Mr du Plessis said further.
On the whole, domestic and cross-border Initial Public Offering (IPO) capital raising by African issuers in H1 2018 increased by 33% year-on-year to USD 396 million, while volume grew by 25% to 5 IPOs.
However, the Index also shows that when compared to the same period in previous years, IPO activity in H1 2018 is low: compared with H1 2016, capital raising is lower by 35%; compared with H1 2015 and H1 2014, value is down by around 70%.
During the first half of 2018, the largest IPO deal in Africa was Libstar Holding Ltd’s launch on the Johannesburg Stock Exchange (JSE), raising $243.8 million in early May 2018.
One of the most anticipated IPOs in the region is MTN Group’s Ghana offering, which could raise as much as $500 million when it closes by 31 July 2018. This year, one of most talked about IPOs, dual listed on the London Stock Exchange and the JSE, was Vivo Energy’s floatation, which raised over $740 million in May. This was the largest listing of an Africa-focused business since 2005.
“We have noted an increase in enquiries from our clients around listings and IPOS on the Johannesburg Stock Exchange, as well as interest in listing in other jurisdictions in Africa. Cross border capital raising is seen as a good way for investors to raise money in Africa,” Mr du Plessis said.
He disclosed that a number of African companies were planning to list in the near future.
“It looks like the coming years could be the best for capital raising in Africa since the global financial crisis,” the expert in the financial market said.
“In general, investors are beginning to delve deeper into African markets than they have before, they are making sure they know and understand each specific target market. They are looking at a target country’s approach to governance and corruption; is there rule of law? They look at the GDP and how that impacts on population growth and economic growth and the interplay between them. They look at policy and regulation, location, infrastructure and pricing. They are aware that no two countries are the same in Africa, that each market is unique and that they have to be nimble and adaptable in their approach,” he added.
By Adedapo Adesanya
The Nigeria Customs Service (NCS) is seeking a reduction in import duty exemptions, which rose to N34 trillion, limiting its ability to increase its revenue generation threshold.
The Comptroller-General of the Customs Service, Mr Adewale Adeniyi, disclosed that the value of import duty exemption certificate approvals increased to that level in 2025, describing the policy as one of the major factors restricting its revenue generation.
At an investigative session of the Senate Committee on Finance with revenue-generating agencies in Abuja on Monday, Mr Adeniyi explained that government fiscal policies have continued to impact the revenue-generating capacity of the Customs Service, both positively and negatively.
“The NCS would have generated significantly higher revenue over the years if not for government-approved import duty waivers and other external factors affecting collections,” he said.
He added that the Import Duty Exemption Certificate scheme, introduced in March 2020, accounted for about N34 trillion in approvals in 2025, with nearly 60 per cent covering duty-free importation of military hardware due to Nigeria’s prevailing security challenges.
Other government-backed duty waivers, he noted, covered the importation of Compressed Natural Gas (CNG), electric and hybrid vehicles, healthcare equipment and medical supplies, industrial machinery and manufacturing inputs, as well as food import intervention programmes.
While acknowledging the impact of the waivers on Customs revenue, Mr Adeniyi argued that fiscal policy should not be assessed solely on the basis of revenue generation but also on its broader economic and social objectives.
He, however, urged the federal government to establish stronger monitoring mechanisms to ensure beneficiaries of duty waivers deliver the intended economic outcomes, including lower consumer prices, increased local production and improved healthcare access.
The committee also expressed displeasure over the absence of several heads of government agencies invited to the hearing, including the Nigerian Civil Aviation Authority (NCAA), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Industrial Training Fund (ITF), and the Federal Medical Centre (FMC), Jabi.
The Chairman of the Senate Committee on Finance, Mr Sani Musa, warned that the affected chief executives must appear at the committee’s next sitting or face severe sanctions under the Senate’s rules.
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By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.40 per cent on Monday, July 13, buoyed by buying interest in 11 Plc, Central Securities Clearing System (CSCS) Plc and UBN Property Plc, which offset the profit-taking in Food Concepts Plc, the parent company of Chicken Republic.
11 Plc gained N20.69 to end at N227.64 per share compared with last Friday’s price of N206.95 per share, CSCS Plc grew by N1.83 to N91.48 per unit from N89.65 per unit, and UBN Property Plc added 1 Kobo to sell at N1.81 per share versus N1.80 per share.
On the flip side, Food Concepts Plc depreciated by 24 Kobo to close at N2.45 per unit, in contrast to the preceding session’s N2.69 per unit.
As a result, the market capitalisation increased by N9.2 billion to N2.587 trillion from N2.578 trillion, and the NASD Security Index (NSI) improved by 15.33 points to 4,311.67 points from 4,296.34 points.
Yesterday, the volume of securities traded by investors surged by 615.9 per cent to 9.1 million units from the previous 1.3 million units, and the value of securities rose by 997.1 per cent to N320.4 million from the preceding session’s N29.2 million, while the number of deals decreased by 12.5 per cent to 28 deals from last Friday’s 32 deals.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 73.9 million units exchanged for N5.2 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
