By Chijioke Ohuocha
LAGOS (Reuters) - A stock market debut by oil and gas firm Seplat in Lagos and London is likely unleash a round of initial public offerings (IPOs) in Nigeria after they stalled in the wake of a 2008 financial crisis, the head of the country's bourse said.
Oscar Onyema told the Reuters Africa Investment Summit he expected more oil and gas listings to follow Seplat's, which would help tackle the sector's under-representation on the Nigerian Stock Exchange (NSE).
The sector currently makes up just 2.6 percent of market capitalisation versus 14 percent of Nigeria's newly rebased GDP. After Seplat, the sector will make up 5.9 percent of the bourse.
Seplat said it had raised $500 million in its IPO and plans to list its shares in Lagos and London on April 14. The offering gives Seplat a market capitalisation of $1.9 billion. [ID:nL6N0N11JJ]
None of the foreign oil majors such as Shell and Exxon Mobil that have been operating in Nigeria for decades are listed. Only local firms Oando, Forte Oil, Conoil and now Seplat have listings.
Heavyweight cement producer Dangote Cement accounts for a third of the Nigerian bourse, followed by the banking sector, collectively making up 15 percent.
"It will be the first major IPO in the market since the 2008 burst. It could signal the opening of a window for other IPOs to come through," Onyema told Reuters, adding that he expected some of the many newly privatised power firms to follow.
IPOs dried up after a 2008 crash wiped more than 60 percent off the stock market's capitalisation. The index has since recovered, gaining 35 percent in 2012 and 47 percent in 2013, but IPOs are yet to resume.
The market is down 6 percent in the first quarter, which Onyema attributed to the tapering of quantitative easing in the United States, volatile emerging market currencies and Nigeria's forthcoming elections, which had led to some pullback from foreign investors.
Nigeria revalued its gross domestic product (GDP) on Sunday to more than $500 billion, surpassing South Africa as the continent's top economy and shrinking the ratio of stock market capitalisation to GDP to 15 percent, compared with more than 100 percent in most developed stock markets. [ID:nL6N0MY0LT]
"It positions us better to become a gateway to Africa ... for foreign direct or portfolio investments," Onyema said of the rebasing.
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