MTN Nigeria listed its shares on the Nigerian Stock Exchange recently and many people who were anticipating to buy shares from the giant telecoms company developed mixed feelings when they realized that the stocks were unavailable to the public.
The incident raised a lot of speculations by potential shareholders who never got a chance to own shares in the company. Perhaps this misunderstanding between MTN and the public has a lot to do with the fact that these would-be buyers have always expected listings on the exchange to be open to the public.
However, the difference between MTN listing and other stock options that Nigerians are used to is that MTN chose to list its shares by Introduction instead of the widely known Initial Public Offerings, IPO where the stock would have been available for the general public to subscribe to on the NSE trading floor.
The listing by Introduction is carried out to list all the shares held in a company on the stock exchange without a mandatory option of selling shares to the public. In this arrangement, the investors are at liberty to choose whether they’ll sell their shares or not.
So, to clarify some misconceptions that the general public have about the listing, the Nigerian Stock Exchange released a statement that sought to explain the listing option that MTN took.
In like manner, the Head of Research and Equity Analyst at RMB Nigeria, Gbenga Sholotan, further explained on CNBC Africa Power Lunch program that MTN Nigeria is experiencing a new era of growth and after meeting the requirements to list its share by introduction, the company went ahead with the listing on the NSE.
Discussing the details of the listing, Economist and Current Affairs Analyst, Tunji Andrews was joined by Oyindamola Akinyemi from Stanbic IBTC on the Money Business & Economy show on Nigeria Info 99.3 FM, where they both shared more information on the listing.
“There are more than 800 Nigerians that currently hold MTN shares,” Oyindamola revealed, but the fact is that since the listing wasn’t an IPO, no one was under any compulsion to sell their shares to the public.
“The shares were introduced to the stock exchange, but then it now depends if the people want to sell or not,” Tunji Andrews said. There were people who just opened an account and said buy me MTN share” and this was done without first understanding whether the listing option that MTN chose warrants a public offer. He also said that he foresees an imminent IPO in the future.
MTN Nigeria stock was not available to the public because the company filed for listing by introductin and not an IPO. MTN was not given any preferential treatment or allowed to list its shares ceremoniously on the stock exchange as some speculations have it, rather the company met the requirement needed for listing by introduction.
It is expected that the company will eventually file for an IPO where members of the public will have the opportunity to own as many shares as possible in the company. But that will have to come when the time is right.