Sign in
Sign in
Recover your password.
A password will be e-mailed to you.
By Chukwumah Kelechukwu
The agreement by Airtel management and the issuing houses to give 10,000 units of the stocks to every willing stockbrokers for trading on the day of listing made Tuesday listing by the telecom firm successful, a stockbroker privy to the arrangement has told InsideBusiness.
The telecom firm, after a botched attempt to list its shares last week, Airtel Africa Plc successfully listed 3.758 billion ordinary shares on the Nigeria Stock Exchange (NSE) on Tuesday at offer price of N363 per 50kobo share,adding N1.364 trillion to the NSE market capitalization.
InsideBusiness gathered that stockbrokers struck a deal with two of the issuing houses that facilitated the company IPO and shares listing to the effect that Airtel must make available 10, 000 units of the stock to every dealing firm.
“We agreed that if Airtel must list, it has to make available to every willing stockbroker at least 10, 000 units of the stock for trading on the day of listing.
“It is for the stockbrokers to take it or leave it. That was our condition, and the two issuing houses agreed and obliged us,” a senior dealing member of the exchange disclosed.
The shares were listed at an offer price of N363 per ordinary share on the Main Board of The Exchange and at 80 pence per ordinary share on the main market of the London Stock Exchange, the primary listing exchange, on June 28.
Unlike the London listing where the share price fell from 80 pence to 67 pence on first trading day, it rose maximum 10 percent to N399 from N363 per unit on NSE less than 15 minutes after secondary listing on the Main Board of The Exchange.
The market operator who prefers anonymity further disclosed that similar deal was struck with MTN Nigeria, but MTN failed to oblige stockbrokers.
“We had similar agreement with MTN Nigeria when they came to list their shares on the exchange. They agreed to make available part of the 10,000 units on the first and second trading day since they could not afford to do so at once.
“But surprisingly, MTNN failed to fulfill their side of the agreement. So we didn’t want to repeat similar mistake with Airtel. We had to make sure that the deal was properly struck and delivered,” said our source.
The African subsidiary of Indian telecoms giant, Bharti Airtel, which operates a telecoms and mobile money business across 14 African countries was initially billed for listing Friday last week but was postponed, citing the agreement as the reason.
When asked if that postponement had anything to do with the agreement, our source said it was partly the reason for the initial postponement.
Following Airtel Africa’s listing, the market sustained previous day’s bullish close despite losses in bellwether stocks. The 0.1 percentage rise in the All Share Index at 29, 318.85 points were driven by AIRTELAFRI (+10.0%), NIGERIAN BREWERIES (+0.8%), and DANGFLOUR (+1.8%) which enjoyed the most buying interest.
With the additional N1.364 trillion of Airtel capitalisation, equity market capitalisation increased by N1.4 billion to N14.3 trillion up from previous N12.909 trillion while year-to-date losses moderated to 6.7 percent.
A total of eight stocks appreciated in price while 20 stocks depreciated.
“Our bearish outlook on the market remains unchanged, as we believe today’s bullish run is only temporary,” said analysts at Lagos-based Afrinvest Limited.
BADEJO ADEMUYIWA has 23 years experience as a Finance Writer, specialising in Insurance and Investigative Reporting.
Comments are closed.