Since the 2007-2008 global financial crises, there have been growing agitations for multinational companies operating in Nigeria to list on the capital market, to create employment, deepen the market and make capital available for investors.
To engender a willingness to participate in the market, the listing rules of the Exchange had been reviewed to make it easier for these companies to access the market and eventually list their shares. The long reign of bears has become a cause for concern to both retail and foreign investors. For the former, the continuous depreciation in stock prices has become a justification for their apathy to investing in the stock market.
A Professor of capital market at the Nasarawa State University, Keffi, Uche Uwaleke, said there is no doubt that bringing multinationals to the Stock Exchange will go a long way in deepening the market. “But many multinationals are reluctant to come to the Exchange because they would not want to be subjected to the disclosure and corporate governance requirements of the Exchange. Some would not want their financial statements subjected to public scrutiny.
According to him, moral suasion could be achieved by relaxing some of the listing requirements such as an adjustment of the minimum float in the market so that their entry into the market can be gradual. Arik Air, one of the largest Nigerian-owned airlines, had in May 2016, announced plans to list the carrier on the floor of the Exchange, in efforts to boost its capital base, and acquire more aircraft, but the proposal was never realised, until it was eventually placed under receivership by the Asset Management Corporation of Nigeria , in early 2017.
Yussuf also noted that most of the pension fund administrators had reduced their exposure in the market since 2008, following global financial meltdown to minimise losses due to fewer blue-chip companies. “These incentives can come in form of tax holidays, consistent policies, custom tariff, and good infrastructure development. If these and many more are in place, they will serve as a stimulus for them.
With the listing of MTN Nigeria on the Exchange, the market closed bullish, after eight consecutive days of decline.
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