House To Compel Telecom Operators To List On NSE


ABUJA, November 28, (THEWILL) - The House of Representatives Committee on Capital Markets and Institution is proposing a bill, which when passed into law will make it compulsory for all telecommunications, oil and gas companies operating in the country to list on the Nigeria Stock Exchange (NSE).

Chairman of the House Committee on capital markets Hon. Herman Hembe (PDP, Benue) who disclose this at a news briefing Monday said ‘the market in Nigeria is in a state none of us can be proud of’.

He lamented that telecom and oil companies make huge profits in Nigeria but do not list on the exchange here. According to him, ‘MTN for instance got a licence in 2001 for the sum of $285 million USD mostly financed by Nigerian banks. Between January and June of the same year, MTN repatriated some 5 billion USD as profits from their Nigerian operations.’

He explained further that “it is not in doubt that the MTN Nigeria which is listed on the Johannesburg stock exchange under the industrial-non clinical services-telecommunications sector is the largest contributor to the bourse with MTN group as the largest player in the sector.”

The committee chairman also disclosed that the 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 on the exchange has by 2011 witnessed a 56 percent decline to 20,202.50 points and a market capitalization values N6.44 trillion.

He attributed the collapse of the market to the fact that ‘the nation’s stock exchange was and still is relatively small and unrepresentative of the size of the nation’s economy, underdeveloped, illiquid and operated in isolation from other markets’ insisting that this must change to engender development of the Nigerian economy.

Speaking on the intendment of the proposed legislation, the chairman said it will ‘get telecoms operators in Nigeria listed on the bourse of the Nigerian Stock Exchange. This sector, with a starting market of less than a million in 2000, now carters for over 90 million users.

On the energy sector, Hembe said the Committee would set out to get the sector and its players also listed on the bourse of NSE.

The legislator revealed that the committee would partner with relevant stakeholders to speed up passage of the Petroleum Industries Bill (PIB) to foster subsequent listing of major upstream players, NNPC and other operators in the oil sector.

“We would also legislate to get power generation and distribution companies listed once the process of their privatization is complete.

“What needs to be done is very clear to us and the general consensus is that the reforms we have planned will address the development gaps as observed,” he added.

Hembe said that the Committee would engage widely with all stakeholders to get best inputs into the proposed bill.

He explained that the partnership with stakeholders is to engender growth and diversification of the market so that it can be more reflective of the nation’s economy.

The Committee urged the NSE on its part to speed up its evolution process to become more like its counterparts in other economies in the world.