Seplat Increases Market Capitalization On Nigerian Bourse

Indigenous oil and gas firm, Seplat has spurred the Nigerian Stock Exchange (NSE) market capitalization by 2.23 percent, following the launch of its IPO.  Seplat’s IPO, which listed 543.28 million shares for a debut offer of N576 ($3.6) per share, added N28 billion ($173.9 million) to the NSE, raising total capitalization to N12.83 trillion ($79.7 billion).

The NSE is targeting a $1 trillion capitalization by 2016, and seeks greater involvement from the country’s key sectors including oil and gas and telecommunications.  Labeled the largest IPO in sub-Saharan Africa since Dangote Cement in 2011, an air of optimism has been hovering since the announcement of a possible listing by the emerging oil operator, with private investors keen to acquire stakes in what is considered a rare opportunity to participate in the tightly-controlled oil industry.

The fact that Seplat is the first major upstream operator to be listed on the stock exchange paint a clear picture, and activities on the first day of trading further underscored the under representation of the industry.  A report by BusinessDay confirmed that only 70,000 units were traded shortly after the listing, with most institutional investors, over 300 in number and holding more than a 48 percent stake, deciding against trading their stake.

This sparked a surge in share value from N576 ($3.6) to N604.8 ($3.7), following an extreme shortage in share supply.  According to market analysts, share price could rise as high as N700 ($4.3) with interest in the 5-yr old company growing rapidly.

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