Seventeen listed companies turned to the Nigerian Exchange (NGX) Limited in 2024 to raise and list a combined total of ₦6.135 trillion in equity capital to fund their operational expansions.
Capital is a crucial driver of business growth, and companies typically raise funds through debt (bonds) or equity (shares). When a company issues new bonds or stocks, it is referred to as a new issue.
The stock exchange, a vital component of the capital market, plays a significant role in mobilizing long-term savings for investment by providing equity or quasi-equity as risk capital to entrepreneurs. The new issues market, which is the primary arm of the capital market, demonstrates the extent of financial resources channeled into long-term securities by corporations and governments.
Listing new issues deepens the market, enhances liquidity, and improves the tradability of shares while expanding access to capital for funding growth initiatives.
According to NGX data, 2024 saw 17 companies issue new listings through initial and supplementary offerings, bringing the total equity raised to ₦6.135 trillion.
Key Listings:
- New Listings:
- Haldane McCall: Introduced 3.122 billion shares worth ₦11.988 billion.
- Aradel Holdings: Listed 4.345 billion shares valued at ₦3.053 trillion.
- Transcorp Power: Listed 7.5 billion shares valued at ₦1.8 trillion.
- Supplementary Listings:
- Jaiz Bank: Raised ₦10.048 billion through private placement.
- Nigerian Breweries: Secured ₦548.733 billion via rights issues.
- C&I Leasing: Converted debt to equity, raising ₦822.917 million.
Other contributors included Japaul Gold and Ventures, International Breweries, Notore Chemical Industries, Wema Bank, and Sovereign Trust Insurance, among others.
Market Impact:
Analysts have noted that these new issuances have significantly deepened the market and expanded its depth. Senior stockbroker Tunde Oyediran highlighted that primary market activities are essential for the growth of any capital market. He noted that the increased market capitalisation in 2024 reflects investor confidence in long-term investments in companies with promising futures.
Ambrose Omordion, COO of InvestData Consulting Limited, pointed out that deregulation has enhanced market competitiveness.
Regulatory Developments:
Dr. Emomotimi Agama, Director-General of the Securities & Exchange Commission (SEC), announced plans to improve regulatory frameworks for borrowing by corporations and governments. New rules on Central Counter Parties (CCPs), set to take effect in 2025, aim to streamline borrowing and introduce derivatives into the capital market.
“These changes will diversify Nigeria’s capital market and open new opportunities for investors,” Agama stated, emphasizing the SEC’s commitment to driving innovation and growth in the market.