Stanbic IBTC Capital CEO Laments Time Lag In Raising Capital On NGX
The Chief Executive officer of Stanbic IBTC Capital, Funsho Akere, has lamented the time lag it takes listed companies to raise equity capital on the Nigerian Exchange Limited (NGX).
He stated this Thursday at the virtual CEO Roundtable event organized by the Nigerian Exchange Limited.
Speaking on the event themed, “Creating the enabling ecosystem for accessing capital from the Nigerian Capital Markets”, Akere decided that it takes between 4-6 months in making a market transaction.
According to him, some companies would rather go to the loan market instead of relying on the capital market.
“We play the Capital Market advisory role. We advise companies on how to raise capital or undertake capital market activities, more like interface with issuers or potential issuers and we have been fortunate to have worked with both MTN Nigeria Plc and BUA Foods Plc on their listing,” Akere said.
“I will just say in terms of challenges, maybe regulation. One must acknowledge that NGX and the SEC have really made significant progress in terms of regulations, innovations we are seeing in the market and the transactions that have been executed have been driven by collaborative approach between capital operators and the regulators especially the NGX and the SEC.
He, however, noted that some of the rules and procedures were still the same as when he started his banking career 23 years ago, stressing that it is unimaginable that the telecommunication industry is still operating the same way they did over 23 years ago.
“So I would say regulation is the area where the NGX, SEC and other regulators can work together to make it easier for listed companies or companies that are trying to seek listing. They should make it easier for them and make it a more attractive platform for businesses.
“Timing is the issue. If you are trying to raise capital, it still takes a significant amount of time to raise equity capital. We have tried to work on the process, but the reality is that it’s still going to take you at least four-six months to raise capital in making a market transaction. If you are trying to undertake a strategic corporate action like buying a business, you would rather go to the loan market where you can complete a transaction in a month as opposed to trying to raise equity capital because you are pressed for time. And you can use regulation to fix that,” Akere added.
The Chief Executive Officer of MTN Nigeria Plc, Carl Toriola, who was also a panelist at the event, however, lauded the important role played by the Nigerian capital.
Toriola hinted that the company’s recent public offering was not geared towards raising capital but to boost the general ecosystem of the market.
“We have had a really good experience listing on the NGX, we were oversubscribed. I know the question is around challenges and how we can resolve it. But I must state on record that we have received incredible support on the NGX and the SEC aa well in getting to where we are today. First and most important, listing MTN on the exchange wasn’t about raising capital because many people know about our balance sheet.
“But as part of our ambition 2025, it’s about our shared value which really speaks to us that in every territory that we operate in, we are creating value not just for shareholders of MTN but for the entire ecosystem and allowing retail and investors to share in growth and revenue of MTN Nigerian in helping to drive institutions such as the NGX, using our digital capabilities to re-expand the size of the market,” Toriola said.
Continuing, he said, “So this has enabled us to diversify the shares of our shareholders and we are very proud that the corporate offer that we launched, 78 per cent of the subscribers were women and 80 per cent were under the age of 40. So that is very attractive for the future. We have broadened the Nigerian shareholding, expanded the platform for creation of Wealth of Nigeria.
“We created a lot of credibility around the capital market and provided access to the wider populace. For us, it’s fantastic and of course there are governance requirements which we have all gone through when we listed by introducing in 2019. So we are cognisant of the stein guidance from the SEC and the NGX. It’s a lot of work, but it’s what you are required to build trust for the public and investors.”
In his welcome address, the Chief executive officer of the Nigerian Exchange Limited NGX, Temi Popoola, assured stakeholders that adequate amendments are being undertaken to improve the listing process on the NGX.
“The advancement of the Nigerian capital market has been supported by collaborative efforts by key stakeholders over numerous years. These advancements have been made possible by advice from companies in our ecosystem. The introduction of enabling policies, amendments of existing regulations while protecting investors’ interest on the capital market.
“As part of efforts to improve the current situation on new listings, NGX is taking a closer look at our rules to see areas of amendments which enable companies to raise capital more efficiently while protecting the investing public. NGX continues to work with several stakeholders many of whom are present today to ensure costs of listing are optimised.”
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