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    Saturday, June 3, 2023

    Capital Market Operators Call for NNPCL Listing

    Some operators have called for the listing of the Nigerian National Petroleum Company Limited on the Nigerian capital market, saying it will boost the capitalisation of the market as well as add value to the energy company.

    The President and Chairman of the Council, Institute of Capital Market Registrars, Oluseyi Owoturo, in a chat with our correspondent on the agenda that the new president of Nigeria, Bola Tinubu, said the energy company needed to be listed.

    NNPC transitioned to a Limited liability company on July 19, 2022, at a formal ceremony at the State House Conference Centre in Abuja, where former President Muhammadu Buhari said, “We are transforming our petroleum industry, to strengthen its capacity and market relevance for the present and future global energy priorities.”

    The transition of the energy company came nearly a year after the Petroleum Industry Bill was signed, thus providing the legal framework for Nigerian National Petroleum Corporation to become Nigerian National Petroleum Company Ltd.

    Owoturo said, “NNPCL has to be listed to stimulate interest in the market. The most exciting new listing was the MTN listing. Since then, there hasn’t been anything exciting of that nature. A listing of the NNPC has the potential to stimulate the market significantly. That could be potentially another MTN coming to the market. In terms of total market capitalisation, it will stimulate significant interest.

    “I think it was in 2019 that Aramco was listed when the Saudi government sold less than 30 per cent of its stakes to the public. Aramco recently overtook Apple as the world’s most valuable company. Now imagine an NNPC listed on the exchange. Government control is reduced significantly and the impact it can have not just on the capital market but on the economy as a whole. The capital market is a barometer of how well the economy is doing. If the economy is not doing well, the capital market cannot do well.”

    He added that asides from the listing of NNPC, the new act enabling states to generate electricity could also birth companies that can be listed on the capital market.

    “NNPC listing could significantly give the market a boost. Not just NNPC. Good enough that the former president signed the bill that enables states to generate electricity. So maybe we will begin to see interesting things, especially in a state like Lagos. So, it is not just about the Federal government now. Because of this new law, hopefully, we will begin to see some interesting things happen in the states.

    “We need to see a bit more privatisation, the government handing off businesses and giving them to the private sector. See what (Femi) Otedola has done with Geregu. Geregu Power has a capitalisation of hundreds of billions. In the hands of the government, that business; pardon my French, was more or less worthless. But an individual has taken control and has gone to boost the capitalisation of the exchange, which is quite significant. We need to see more of that,” Owoturo said.

    Echoing a similar stance, Team Lead, Research and Strategies/ Data Analyst at Atlass Portfolios Limited, Olaide Baanu, said, “The listing of NNPC Limited on the NGX (Nigerian Exchange Limited) can indeed have a significant positive impact on the company and the market as a whole.”

    Highlighting some benefits of the listing, Baanu said, “Increased transparency and accountability. The listing will require NNPC to adhere to stringent reporting and disclosure standards, which will enhance transparency and improve the understanding of the company’s operations. This increased transparency can foster greater trust among investors and the public.

    “The listing of a major state-owned enterprise like NNPC will attract both individual and institutional investors, thereby deepening the stock market. This influx of investors can lead to increased market activity and liquidity, providing more opportunities for investors and potentially driving the overall market growth. -PUNCH

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