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Reps To Compel Telecoms, Oil Firms To List On Nigerian Stock Exchange

By on November 29, 2011

The House of Representative is considering a legislation that will compel the Nigerian National Petroleum Corporation (NNPC), International Oil Companies (IOCs) including Chevron and Shell to be listed on the Nigerian Stock Exchange (NSE).

The bill would also mandate telecoms firms, such as MTN, Globacom, Airtel, Etisalat, satellite service provider, Multichoice and others to list on the Exchange.

Speaking at the National Assembly yesterday, the Chairman, House Committee on Capital Markets and Institutions,Herman Hembe, said the country is being cheated by the refusal of the oil and telecoms companies, which rake in billions of naira, but refuse to list on the NSE.

“These companies make billions of naira and millions of dollars and much of the money they make is from Nigeria. It’s only sensible that they put some in the economy,” he said.

The lawmaker said the effort of the committee on the listing of key players in the economy was in response to already growing public interest on indigenous growth.

“The market in Nigeria is in a state none of us can be proud of. The All-share index that rose to 57, 990.22 points by December 31, 2007, with market capitalisation of N13.29 trillion with over 300 listed securities on the exchange, has by 2011 witnessed a 56 per cent decline to 20, 202.50 points and market capitalisation value of N6.44 trillion,” he said.

Hembe said the reason for the collapse of the market was because it was relatively small and unrepresentative of the size of the nation’s economy. He said to rectify the anomaly, the committee is set to get telecoms operators in  country listed on the NSE.

“This sector, with a starting market of less than a million in 2000, now caters for over 90 million users. These telecommunications companies make huge profits from Nigeria and are mostly not listed on our market.

“MTN, for instance, got a licence in 2001 for $285 million mostly financed by Nigerian banks. Between January and June of the same year, MTN repatriated some $5billion as profits from their Nigerian operations,” he noted.

The lawmaker saidthe MTN Nigeria, which is listed on the Johannesburg stock exchange under the industrial – non-clinical services – telecoms sector, is the largest contributor with the MTN Group as the largest player in the sector.

“The Nigerian group accounts for 25 per cent of the headline revenue of the MTN Group listed on the exchange. The story is not much different with the other telecoms operators in the country.

“Preliminary extrapolated figures indicate that the telecoms firms – MTN, Airtel, Glo and Etisalat- in terms of market capitalisation could account for an average of N6.76 trillion  (MTN –N2.4 trillion, Airtel-N1.55 trillion, Glo-N1.70 trillion and Etisalat N1.1 trillion) by Q2 2012, a figure far higher than the current market capitalisation of N6.38 trillion as at November 22, 2011.”

The Committee chair said that apart from partnering with the relevant stakeholders to speed the passage of the Petroleum Industries Bill(PIB) to “foster the  subsequent listing of major upstream players, the NNPC and other operators in the oil and gas sector, we will also legislate to get power generation and distribution companies listed once the process of their privatisation is completed.”