High Operating Cost Pushes Businesses To Debt Market For Funding

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The tight operating environment has compelled many businesses to rely heavily on debt market for funds to finance their businesses through issuance of

Consequently, only one company, Neimeth International Pharmaceuticals, has shown interest in raising N3.680 billion from right issues on the Nigerian stock market.On the other hand, 17 companies cutting across several sectors of the economy have registered a total of N857 billion commercial papers from January to June 2022 on the floor of the FMDQ Securities Exchange.FMDQ has approved the registration of MTN Nigeria Communication N150 billion CP.

“Regulators should review the cost of raising funds and listing requirements to attract more companies to source funds through equity and encourage listing.”On his part, the vice president, Highcap Securities Limited, David Adonri, said, “Commercial Papers are short term money market instruments used to finance working capital while equities are long term instruments used to finance fixed or long-term assets. They serve different purposes.

 

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