FX crisis could drive companies to listing abroad, NGX warns

The Chief Executive Officer of Nigerian Exchange Ltd., Temi Popoola, has warned that the scarcity of Dollar issue in the country could drive companies to listing abroad instead of Nigeria.

According to Popoola, if the target companies cannot access dollars within the Nigerian market, many of them may opt to list abroad.

He also revealed that the capital market in the country is considering dollar-denominated bond listings.

Popoola said the dollar-denominated bond listings and dollar-denominated stock listings have been proposed to the Nigerian government and the proposal has received positive interest.

While the timeframe for the implementation was not disclosed, the initiatives will target companies generating revenue in foreign currency and those operating at the free trade zones.

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Also, the capital market authority is proposing companies pay dividends in dollars. These initiatives, he told Bloomberg in a report on Wednesday, will improve the availability of foreign exchange in Nigeria and address the fluctuations in the forex market.

“Our primary objective is to enable these companies to issue bonds denominated in dollars and eventually offer equity in dollars as well. It could potentially address the challenges posed by fluctuations in foreign currency,” Popoola said.

Meanwhile, Popoola gave assurance on the possibility of the initiatives becoming a reality, stating that the stance of President Bola Tinubu in solving the forex market challenges gives confidence.

“Given the proactive stance of the current administration, it is reasonable to anticipate that these objectives can be achieved.”

READ ALSO: Dollar extends upward swing as official window sells at N773

In the Investors and Exporters’ (I&E) window of the official market, the naira to dollar exchange rate ended trading at N770.72/$1, up from N761.32/$1 it traded the previous day.

The price of the dollar increased by N9.2 kobo, knocking down the value of the naira by 1.23 per cent in the official market, the FMDQ Exchange disclosed in its forex market data.

Also, according to the official market aggregator, the dollar was sold as high as N799.90/$1 and as low as N720/$1 before the curtain closed on N770.72/$1.

Meanwhile, Naira Rates, a parallel aggregator, stated that the average dollar rate in the black market was N867.5/$1. The price of the USD depreciated by N6.8 kobo, from N874.3/$1.