Communication Sector

[ayosade]

I am new the stock market and would like to get every reliable and viable assistance I need to get on. Please can anyone tell me why the communication giants e.g MTN, GLO, CELTEL, MULTILINKS etc are not listed on the NSE.
Thanks.
Ayosade.

[pumping]

Let me attempt this from a layman's point of view.

The decision to be listed on the NSE (Going public) is determined by the owners of a company and their circumstances. Usually companies will not go public when they are making increasing profits without necessary expanding at the same rate. They will like to keep these huge profits to themselves. By the time companies stabilize the owners can now decide to go public. So don't be surprised in future if such companies also approach the market. The companies on the NSE today generally went through this path.

Some of the reasons for going public are listed below...

1. Expansion - By going public, the company which now has some track record will have the opportunity to approach the public for resources to fund ambitious growth plans. The owners may not be able to raise the same level of funds without say borrowing.
2. One time profit - Instead of waiting for annual profits from the company, the owners may wish to realise the total worth of the company by selling of to the public at once. Even in this case, many owners still retain some ownership. This is a way of making serious money since people are ready to pay for the future earnings of the company Today.

Understand that going public has its own draw backs which include

1. The profit now has to be shared with the new owners
2. Tecnically all the new owners also have a say in the running of the company including the appointment of the board members
3.The company is subject to certain regulations including making your results public, the constitution of the board, disclosures etc

Note that the reverse can also happen. Individuals or corporate investors can decide to buy out a company on the NSE if they believe they can make more money out of it and of course if they can afford to buy it.

Note that for instance the bank ETB is also not listed on the exchange probably because so far the owners feel they have enough funds to continue running the bank. So it is not only communication companies.

**Rumour has it that ETB is going to be listed soon and there will be private placment in November...I will post this on any thread..**

Others in the house, please add some sugar...

Enjoy.

Pumping.