MTN’s pending listing on the Nigerian Stock Exchange (NSE) is likely to be "impactful" and "transformational" for the bourse, whose market capitalisation is estimated at $82bn.
The stock exchange’s CEO, Oscar Onyema, told BusinessLIVE on Monday that the listing had the potential to bring a new class of participants into the market.
"We have not received an application yet from them [MTN] but we engaged with them and we are having conversations," said Onyema. "I think it will be very impactful, especially considering the fact that they have millions and millions of subscribers. It could be a very transformational listing if it is done the right way."
Nyema, also president of African Securities Exchanges Association, was speaking from South Korea’s second city, Busan, the site of this year’s annual meeting of the African Development Bank’s (AfDB’s) board of governors — who are largely finance ministers of its member countries.
MTN, which is starting to recover from a massive fine imposed by regulatory authorities in Nigeria about three years ago, has announced plans to list on the NSE by the end of 2018. It is also looking to borrow as much as 400-billion naira ($1.1bn) in Nigeria in 2018 as the company, Africa’s largest wireless carrier by sales, seeks to fund local investment and replace existing debt.
Onyema described the NSE as a multi-product exchange that dealt in equities, bonds and exchange traded funds. He estimated capitalisation on the equities side at about $42bn.
Stock markets on the continent have often been perceived as offering inadequate safeguards for investors. But Onyema said the NSE recently implemented major reforms, including the introduction of minimum operating standards for the broker-dealer community.
"In Nigeria in the last five years we have done a significant amount of work to up the standards and regulation, and if you look at the rule book, for example, it has grown significantly, and its now electronic as well and organised to international standards."
MTN’s net debt rose to R57bn in 2017 from R52bn the previous year. The company planned to shift its focus from dollar-denominated debt to debt in local currencies where it operated, according to Bloomberg, quoting MTN chief operating officer Ralph Mupita. MTN also recently raised money in local currency for its Ghanaian and Ivory Coast operations.
• Johwa is in South Korea as a guest of the African Development Bank.
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