ICT Sector on Stock Exchange Grew By N3trn

In 2019, the Information Communications Technology (ICT) sector on the Nigerian Stock Exchange (NSE) grew by N3.01 trillion due to the listing of MTN Nigeria and Airtel Africa, LEADERSHIP has learnt.
The sector recorded 11,989.23 per cent growth or N3.01 trillion in market capitalisation to close at N3.282 trillion in 2019 to emerge as the sector with highest growth rate as against N27.153 billion it recorded in 2018.
Natural resources sector came second with 12.29 per cent growth rate recorded in 2019. However, healthcare sector recorded the highest drop in market capitalisation with 30.30 per cent loss as consumer goods and the agriculture sector followed closely with yearly decline of 23.60 per cent and 20.22 per cent, respectively.
Total equities market capitalisation grew by N1.243 trillion, representing a growth of 10.60 per cent in 2019 as it moved from N11.728 trillion in 2018 to N12.971 trillion in 2019. As at December 31, 2019, the ICT sector contributed 12.68 per cent to the total NSE market capitalisation.
The sector has five sub-sectors on the mainboard and also listed on the premium board of NSE. On the mainboard, the sub-sectors are Computer Based System, Computer and Peripherals, IT Services, Processing System and Telecommunication Services.
The companies listed under these sub-sectors are Courteville Business Solutions, CWG, NCR Nigeria, Tripple Gee and Company, Chams, E-Tranzact International and Airtel Africa, while MTN Nigeria is listed on the Premium Board of the NSE.
The importance of ICT to different sectors of the Nigerian economy cannot be overstressed and it is one sector that has distinguished itself. Apart from contributing hugely to the country’s Gross Domestic Product (GDP) at 13.8 per cent as at the end of the second quarter, 2019, its sub-arm, telecoms have remained a “star performer”, according to the Nigeria Bureau of Statistics (NBS).
According to analysts, other sub-sectors, including software, hardware, e-learning, e-commerce, among others were, however, struggling to live up to expectations and make Nigeria more competitive, not only in Africa but across the globe.
As at today, the yearly importation of IT solutions in Nigeria is put at over $2 billion. The country’s hardware sub-sector is 80 per cent foreign-dominated. The fact is that Nigeria is still very much a consuming nation. The country’s technological prowess is abysmally low. Nigeria has consistently, in the last seven years, ranked lowest in the Global Innovation Index (GII) and had not fared better even before then. In the 2019 GII, Nigeria ranked 114 of the 129 economies graded.
The listing of MTN Nigeria Communication and Airtel Nigeria on the NSE in 2019 injected new life into the ICT sector of the stock market, positioning it as one of the most highly capitalised sector on the stock exchange.

The development, according to capital operators, aligned with market expectations and justifies the clamour for the listing of other blue chip indigenous and multinational companies on the local bourse.
There have been debates in the last few years over the benefits of having the telcos and other companies in sectors underrepresented or not represented at all on the NSE, list in order for the stock market to adequately reflect the economy.
An analysis showed that the market capitalisation of the ICT sector shot up to N2.59 trillion following the contribution of N1.8 trillion capitalisation by MTN on its listing on May 16, 2019. The sector, again, rose by another N1.36 trillion on July 9, 2019, following the listing of Airtel Nigeria.
Meanwhile, operators have emphasised the need for the government to introduce incentives that would encourage other companies to seek listing and also create an enabling environment for new listings.
They reiterated the age-long call for the privatisation of government-owned enterprises and listing of same on the local bourse.
According to them, improvement recorded in the telecom sector following the listing of MTN and Airtel should, ordinarily, be a motivation for the government to pass the Petroleum Industry Bill that would allow for the listing of government-owned oil enterprise, the Nigerian National Petroleum Corporation (NNPC) and other oil majors.
During the listing of MTN on the Exchange, the CEO of NSE, Oscar Onyema said that it created a new telecoms and technology asset class for investors and provided an opportunity for a wider group of Nigerians to be part of the telecom growth story.
The managing director of Highcap Securities Limited, David Adonri, stated that it was not surprising that the listing of MTN and Airtel had become the game changer in the capital market, saying that the performance was in line with the expectations of the market operators.

Also, the managing director/CEO, Cowry Asset Management, Johnson Chukwu, said that “the telecommunication sector is almost non-existent on the Nigerian Stock Exchange (NSE). We have had Starcomm listed and later delisted and the telecom sector became almost inactive on the stock exchange.”