CEM REPORT, ENERGY | With the entrance of Transcorp Power, the Nigerian stock market started the new week on a positive note, with the All-Share Index (ASI) rising by 0.10% on Monday, March 4th, 2024. This positive sentiment came despite the recent hike in benchmark interest rates, which typically attract investors towards fixed-income securities.
Transcorp Power Joins the NGX Family
The highlight of the day was the listing by introduction of Transcorp Power Plc on the Nigerian Exchange (NGX). The company listed 7.5 billion ordinary shares of 50 kobo each at a price of ₦240 per share, adding a significant ₦1.86 trillion to the market capitalization of the Nigerian bourse.
“This listing is a significant milestone for Transcorp Power Plc,” said Mr. Peter Ikenga, the CEO of the company. “It allows us to access a wider pool of capital and continue to invest in our growth plans.”
Investor Interest Despite Rising Interest Rates
Despite the recent increase in interest rates, investors showed strong interest in Power company, exchanging 40 million units of shares worth N10.56 billion on the first day of listing. This demonstrates continued investor confidence in the Nigerian power sector and the potential of Transcorp Power.
“While the rising interest rates make fixed-income instruments more attractive, the long-term growth prospects of the Nigerian power sector continue to entice investors,” said a Lagos-based analyst who wished to remain anonymous.
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Transcorp Power Shareholding Breakdown
As of December 31st, 2023, the shareholding structure of Transcorp Power reveals a majority stake held by its parent company, Transnational Corporation Plc (Transcorp), at 51.57%, translating to 3.87 billion shares. RichPoint Limited holds the second-largest stake with 33.27%, followed by Woodrock Energy Resources Limited (7.46%), Seaforce Investments Limited (3.60%), and Thomassen Holding Limited (2.57%). The remaining shares are distributed among smaller shareholders.
Positive Closing for the NGX
The day ended on a positive note for the NGX, with the All-Share Index closing at 98,847.89 points, up from the previous day’s close of 98,737.06 points. Similarly, the market capitalization climbed to N55.889 trillion from ₦54.027 trillion. Investors exchanged a total of 429,639,960 shares valued at ₦19.924 billion in 10,749 deals.
The successful listing of Transcorp Power and the overall positive performance of the NGX on the first day of the week indicate continued investor confidence in the Nigerian capital market. While the recent interest rate hike might pose some challenges, the long-term growth potential of the Nigerian economy and its key sectors like power remain attractive to investors.
