Nigeria bourse CEO says Dangote refinery IPO to widen investor base

By Libby George and Karin Strohecker

LONDON, Oct 22 (Reuters) - Dangote's $1.6 billion refinery IPO could grow Nigeria's active investor base fivefold, said the CEO of the country's stock exchange, which hopes it will deepen links with other African markets.

Billionaire Aliko Dangote launched what would be Africa's biggest IPO earlier this month, aiming to bring in millions of retail investors. The offer runs until end-October.

Temi Popoola said the Nigerian Exchange Group was using the offering to deepen links with bourses from Egypt and Kenya to Botswana and Ethiopia, with depositary receipt arrangements either in place or awaiting approval.

"Africa is being connected not just by rhetoric, but (by) real solutions on the ground," Popoola told Reuters at the Financial Times Africa Summit.

Around 5% of Nigerians, equivalent to around 12 million people, participate in capital markets, but only hundreds of thousands trade actively, Popoola said.

Marketing the Dangote offer through WhatsApp, point-of-sale machines and even basic phones could allow the exchange to "leapfrog" years of investor outreach, Popoola said.

"What we expect this offer to do is ... make that three to five times the number of active investors that we have in the country," he said, declining to give a figure.

Popoola said the offer could test investor demand beyond Nigeria and help position it as a deeper pool of capital for companies across Africa.

MORE LISTINGS TO COME

Popoola said more Nigerian companies were considering listings in markets including London, New York and the Middle East, increasing the need for infrastructure allowing shares to trade across markets.

Seplat, Airtel Africa and Guaranty Trust Holding Company already have secondary London listings and Dangote Cement plans one as soon as November.

"Those shares are fungible. Capital is able to flow quite freely ... if we can emulate that across many other markets, it's in the interest of our customers," he said.

Popoola said private capital was making it harder to attract listings, as larger companies can raise money in other ways.

The exchange expects fewer than 10 Nigerian companies to list over the next year, he added.

Popoola welcomed JPMorgan's decision to add Nigeria's domestic sovereign bonds to its new frontier-market local currency index, saying the return of debt investors can pave the way for equity investors.

"That's exactly what we are seeing now, so this is a very good precursor," he said.