By Richard ABANGWU InvestAdvocate

Lagos (INVESTADVOCATE) – Initial Public Offerings (IPOs) will follow the Nigerian Capital Market Recovery (NCM); Victor Ogiemwonyi, Managing Director (MD) Partnership Investment Company Plc said this on Wednesday at the Capital Market Correspondents Association of Nigeria (CAMCAN) Monthly Forum held at the Nigerian Stock Exchange (NSE) in Lagos Nigeria.

Ogiemwonyi said in his presentation titled “Market reforms; The Journey So far” that the IPO Market drives one another and the reason the Market is not seeing many this time around is because Issuers are not confident that the Market will support it.

“ If there is not going to be liquidity, there is no point going to the Market to raise funds through IPOs; so, once Issuers are there and very many people are eager to  buy Securities, even old Companies that are here who want raise more money wants to be sure that there is a level of confidence” he said.

He affirmed that apart from the level of confidence, there should also be a level of participation that will ensure when Companies bring IPOs to the Market, they will not fail.

“ So IPOs are coming and a lot of things are been done; such as the re-launch of the Alternative Market which is one of the initiatives of trying to push people back to issuing Securities” Ogiemwonyi said.

He further affirmed that there are people with money and want to invest in Securities; but do not want to come to the Market.

According to him, once a couple of Companies come to the Market with successful IPOs, many people will come to invest in the Market. “Remember there was a time every Issue was oversubscribed, now we want to see that back to the Market, and if that happens, we will see so many investors in the Market” he said.

Ogiemwonyi said all the Private Placements (PPs) that are yet to be listed, are not deliberately so; “ the very simple truth is that Companies come to the Market to get liquidity and if that is not existing, why would they come to the Market to list?” he affirmed.

“The Market is showing a signal of full recovery and IPOs will follow up” Ogiemwonyi said.

Ogiemwonyi in his presentation said the NSE closed 2012 with over 34% gain and is already doing close to 20% in 2013 already, “with this, I can say that the Market has recovered only 50%, it takes time for the Market to recover; but with time it will come back fully”

Reports by Financial Times (FT) in November 2011 said that in Nigeria, the Market witnessed an increased number of Public Offers, IPO’s and Rights Issues during and after the banking consolidation exercise with many Companies coming to the Capital Market to access funds from Nigerian and Foreign Investors.

Also, the FT Report affirmed that between 2006 and 2010, the Market recorded about 180 different such offers – The number of IPO’s alone in the Market within the stipulated five (5) years period was 88, Public offers numbered up to 54 while 38 rights issues were witnessed.

In 2006, the number of Securities (IPO’s, Public Offers & Rights Issues) offered to the Market was 79 while the figure dropped drastically to eight (8) in 2010 indicating that the Capital Market is less efficient in channeling the required capital that is needed for business expansion.

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