Why companies find NSE listing difficult – Nwosu

Many companies do not want to list on the Nigerian Stock Exchange (NSE), contrary to the expectation at the beginning of the year.

Among such recalcitrants are many multinationals and public sector companies that have avoided listing for the generality of Nigerians to benefit from the profits they make.

The National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said that with the challenging operating environment and a non-legal requirement for companies to list, many companies qualified for listing have evaded listing on the NSE.

“I recall that when the Nigerian Bottling Company was delisting from the market, we kicked against it and the authorities told us that the market guarantees free entry and free exit. The government should understand their plans before they make any pronouncement. If they had mismanaged that exit then and others that went out of the capital market, I don’t think that it is appropriate to force anybody to list in the stock market.”

Nwosu called on the government to ensure that before companies come into the country, they should be made to sign an undertaking for listing on the exchange few years after commencing operations in the country.

He called for a free agreement between the government and business organizations before any multinational comes into the country. The agreement, he said, should relate to listing the company’s stocks on the stock market after a given number of years.

“There should have been an agreement with them. The agreement should say “before you take advantage of the profit you are making through dividend payments and also providing entrepreneurs capital.”

Nwosu argued that where companies were not made to sign for listing before they commenced business operations in the country, it will be a bad management for the Nigerian government to force multinationals to be quoted.

“Also, has the government been able to prepare its own companies or corporations to also get listed? There was a time they unbundled NEPA, and they said they had six companies from unbundled NEPA. They then said that the six companies will be listed on the exchange. Till today, there is no sign that the companies have started work towards listing on the exchange.

The federal government, he said, also unbundled the Nigerian Ports Authority, assuring that the companies that emerged from the exercise would be listed on the exchange, but they are yet to commence bringing the companies’ on the Exchange.

Nwosu said that charity should begin at home. “Take MTN, for instance. Pascal Dozie was told that since you are getting a lot of money from us through MTN, get them quoted, and out of pressure from us they sold shares to Nigerians through private placement and that is why Nigerians are having shares of MTN. Otherwise, we wouldn’t have had any opportunity to buy MTN shares.”

Nwosu reminded that against forceful listing on the exchange, only persuasion would make hitherto unwilling companies to list on the NSE. “It is only through persuasion that you will get the companies to get listed, if MTN is to get listed, the other companies in that sector will also be listed so that it doesn’t look like taking a pound of flesh from MTN.”