Stockbroker on why foreign companies won’t list in Nigeria

Foreign investors would only come to Nigeria to buy shares of quoted Nigerians companies but a foreign company would not come here to list at least for now, according to Godwin Obaseki, a stokebroker.
Abdul Imoyo

Obaseki was reacting to the continued growth in the liquidity of the secondary market of the Nigerian stock Exchange (NSE) with strong presence of foreign investors.

The chief executive, Afrinvest West Africa Limited, says the attributes of the current market growth are democracy, Federal Government’s reform programmes, and investor demand for global best practices.

According to him, foreign investors are really looking into the Nigerian market even as the local companies are putting their shares abroad for those investors who cannot get here.

"I do not see an European company coming in soon to take advantage of the vibrancy and liquidity in Nigerian capital market (Lagos) to list their companies. There is no attraction, because there is more money in Europe than coming to list in Lagos," Obaseki said.

"But we should be looking at more companies in the sub regions, that is, rest of West Africa coming in soon to take advantage of the vibrancy and liquidity in Lagos to list their companies."

He added: With Euro-bond, foreign investors are beginning to look into Nigerian securities, and "they don’t want to sit in Europe and USA to buy, they have been to China and Hong Kong. Suddenly, we are beginning to see them move in because of the strength of our market."

According to him, Nigeria can either find West African companies with operations here who need capital for their own market or countries that do not have a vibrant capital market like Nigeria to list their companies.

It would be recalled that M-net super sports of South Africa, which listed on the NSE a few years back, had since withdrawn from the NSE.

However, Obaseki has canvassed the development of market infrastructure such that investors who are buying new issues would get value for their money.

Specifically, he was of the view that investors in the primary market such as those buying initial public offerings (IPOs) should be issued share certificates electronically, such that after allotment of shares they could trade their holdings immediately.

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