Nigeria’s IPO market shows signs of life after 2008 financial drought

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    Nigeria set to see IPOs again

    * IPOs virtually dried up after a 2008 crash

    * Exception was oil company Seplat which listed in 2014

    * Aviation firm, resinsurer, oil company and MTN set to list

    By Chijioke Ohuocha

    LAGOS, June 1 (Reuters) – More companies are lining up to list on the Lagos stock exchange, kick starting Nigeria’s IPO market after a long drought.

    Sources familiar with matter said 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.

    They follow on the heels of South Africa’s MTN which has said it plans to list its Nigerian unit this year but has not set a date.

    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.

    SAHCOL is going through the regulatory process ahead of a planned IPO in August when core investors will sell a stake, while Nigerian Reinsurance aims for an IPO in November in which the government will sell part of its stake, the sources said.

    “I’m expecting more transactions out of Africa in the equity markets, both in Nigeria and across Africa,” Miguel Azevedo, Citibank’s managing director and head of investment banking, Middle East and Africa, said.

    “I think at the end of the year we will see that 2018 was the biggest year for African IPOs since the financial crisis.”

    Alex Okoh, director general of the Bureau of Public Enterprises, said the government has 11 assets it plans to either concession or sell to strategic investors this year, ranging from power assets to sports stadiums.

    Nigeria’s stock market rose 16 percent in the first quarter, helped by rising oil prices, but has recently seen a sell off and is down 0.4 percent year to date as rising U.S. interest rates hit emerging markets and due to political risk ahead of a presidential election next February

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    Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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