National Assembly To Compel MTN, Glo, Airtel and Etisalat To List On The Nigerian Stock Exchange

* Federal lawmakers say MTN, Glo, Airtel, and Etisalat can provide a capitalisation of 6.76 Trillion Naira

A new law planned by the National Assembly is to compel the listing of multinational telephone companies operating in Nigeria on the Nigerian Stock Exchange. The move could raise more than Six Trillion Naira of market capitalisation, lawmakers said on Monday.

Despite generating trillions naira in profit from the Nigerian economy, many telecoms companies, as well as some energy-related multinationals, have for years not been listed on the bourse of the Nigerian Stock Exchange. The House of Representatives Committee on Capital Market said the new law, to be put before the House in days, will make it mandatory that a percentage of the foreign companies be listed on the NSE.

“These companies make billions of billions of naira in profit annually from Nigeria, so it’s only natural that the put back part of the money into where they are made,” said Herman Hembe, the chairman of the committee.

Nigeria’s All-share index that rose to 57,990.22 points by December 31, 2007 with market capitalization of N13.29 trillion with over 300 listed securities by 2011, has witnessed a 56% decline to 20,202.50 points and a market capitalization value of N6.44 trillion.

The committee said “none of us can be proud of” the present state, blaming the huge fall on a “relatively small” market that is unrepresentative of the size of the nation’s economy. “This is unsustainable and must change to engender development of the Nigerian economy,” the committee announced at a media briefing yesterday. The committee reserved very harsh remarks on the phone companies in particular, although it promised that the reform will target other sectors as well.

“MTN for instance got a license in 2001 for the sum of 285 million USD mostly financed by Nigerian banks,” the lawmakers cited. “Between January and June of the same year, MTN repatriated some 5 billion USD as profits from their Nigerian operations.” The company is rather listed on the Johannesburg stock exchange with the Nigerian group accounting for 25 per cent of its headline revenue, the committee added.

If the four major companies, namely, MTN, Airtel, Glo, and Etisalat were listed, that will provide a capitalisation of N6.76 trillion, a figure far higher than the current total market capitalisation.

The law will also target energy sector and its players as well as power generation and distribution companies. Hembe said concerns about viewing the move as attempt at nationalising the companies do not arise since the law will target only a percentage of the revenues.

Source: Daily Times News

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