In bid to lure tech unicorns, Nigeria bourse reviews IPO rules

The Nigerian Exchange Group will review membership rules to lure tech unicorns and other companies to list on Africa’s second-biggest stock exchange, where there’s been a lull in new offerings.

The Lagos-based bourse plans to ease requirements such as track record of profitability and the quarterly filing of financial statements, Olumide Bolumole, the divisional head of listings at NGX, said at a virtual conference on Thursday.

“If you are looking to attract growth companies that are in their early stage, quite clearly having a profitability test is a major hindrance,” Bolumole said.
Nigeria’s stock market hasn’t had an initial public offering in three years. Listings looked out of reach after economic growth in Africa’s biggest oil producer slowed because of the coronavirus pandemic, leaving investors with fewer equities to choose from and lowering trading volumes.

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The bourse is counting on regulatory changes attracting technology companies that want to raise further capital or create liquidity for existing shareholders, said Bolumole. Many Nigeria and Africa-focused tech startups have attained unicorn status — a $1 billion valuation for a private company — in recent years, including Jumia Technologies AG, Interswitch, Flutterwave, OPay and Andela. None have listed in Lagos.

Source: Bloomberg Business News and Capital Markets in Africa