Passage of PIB Could Push NNPC Listing in 2021 –Analysts
The passage of the dragged Petroleum Industry Bill (PIB) could push listing of the Nigerian National Petroleum Corporation, NNPC, in 2021, analysts said in a report. The state owned Oil Corporation has indicated plan to list 40% of its shares when the industry bill is passed.
However, after series of adjustment, Nigerian Senate has been unable to pass the bill but indicated to complete the process in 2021. In a report titled navigating the unsteady terrain, Vetiva Capital Analysts said they are looking forward to possibility of new listing as Senate indicated decision to pass PIB this year.
The report stated that over the course of 2020, there were some key developments in the equity space that could have positive impacts. According to analysts, the impact is not only on market stability but as well as long term growth of Nigerian Stock Exchange (NSE).
The report hinted at the demutualization of the exchange and the expectation that the PIB will be passed some time in Q1-2021. Vetiva said the latter could pave the way for listing more oil and gas firms on the exchange, as well as state-owned enterprises.
Historically, analysts said government owned enterprises have gained substantially following listings.#Policy on Remittances, Oil Price Rebound Could Restore Naira – Analysts
Citing examples, Vetiva capital analysts point at former government owned entities like Flour Mills of Nigeria and Okomu Palm Oil. It stated that both companies have seen improvement in efficiency as well as significant growth in value following their listing on NSE.
“With the Senate stating that PIB will be passed in 2021, we are cautiously optimistic that the law will pave way for possible listing of NNPC. We recall that in 2018, the NNPC stated its plan to list 40% of its shares on NSE once the bill is passed,” Vetiva said in the report.
Analysts stated that with the equities market appearing to be the only viable option available to domestic investors, we believe now presents a favourable time for firm seeking equities financing.
In March 2020, NSE announced that it would carry out a demutualisation process as it seeks to list on the exchange. Explaining this, analysts said the process will convert NSE to a publicly traded company, allowing it to be eligible for listing on the local bourse.
“Such a listing would be positive for the market, as it would provide a boost to local investors’ confidence while simultaneously deepening the exchange,” Vetiva noted. Should the process be completed in 2021, analysts at Vetiva said they foresee additional value gain for the exchange and investors. Passage of PIB Could Push NNPC Listing in 2021 –Analysts
