NGX Soars: New Listings Propel 10% Surge in Market Cap Over 2 Years

Infostride News reports that the Nigerian Exchange Limited (NGX) has disclosed that the addition of new listings on the NGX has significantly contributed to over 10% of the market capitalization over the last two years. The Chief Executive Officer of NGX, Temi Popoola, shared this insight during the MTN Capital Markets Day held in Abuja. Popoola highlighted the global challenge faced by exchanges, particularly the increasing trend of delistings.

In contrast to the prevalent delisting trend, Popoola emphasized the noteworthy surge in NGX’s market capitalization, attributing more than 10% of this growth to new listings. This statistic underscores NGX’s growing prominence as a preferred destination for corporate listings and capital raising activities. Popoola acknowledged the prevailing concern about delistings, not only in Nigeria but also on major global exchanges, citing Johannesburg as an example struggling with similar challenges.

On a global scale, Popoola pointed out that Initial Public Offerings (IPOs) have experienced a slowdown of over 60% in the last two years, according to data from market provider PitchBook. Additionally, he noted the scarcity of smaller cap stocks on public exchanges due to various factors such as voluntary and involuntary delistings, mergers and acquisitions, and liquidations.

Addressing the shift of capital from public markets to private ones, especially among smaller companies, Popoola outlined NGX’s strategy to replace delistings at a pace exceeding their occurrence. He highlighted significant listings within the past two years, including BUA Foods, Geregu (the first power sector listing), MeCure Industries, VFD Group, and Nigeria Infrastructure Debt Fund – the first listed Investment Trust.

Popoola also underscored the importance of government advocacy and policymaking as a potential solution to the challenges faced by exchanges. Drawing on historical examples, he pointed out the transformative impact of government interventions through policy changes. Notable instances include the banking sector and pension reforms of 2004, which positively influenced market growth.

In emphasizing NGX’s commitment to proactive strategies and collaboration with government initiatives, Popoola highlighted the exchange’s positioning as a dynamic and resilient platform. The goal is to navigate challenges, particularly in the face of global trends impacting exchanges. By actively engaging with government advocacy and policymaking, NGX aims to fortify its position and contribute to sustained market growth.

As reported by Infostride News, NGX’s proactive approach and focus on attracting new listings signal a commitment to fostering a robust and resilient financial market in Nigeria. The exchange’s strategy not only addresses the challenges posed by delistings but also positions it as a key player in supporting economic growth and development.