Market operator urges small firms to take advantage of NSE’s ASeM
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
Charles Fakrogha, head stockbroker and chief relationship officer at Foresight Securities & Investment Limited, has urged small businesses in need of expansion to take advantage of the Alternative Securities Market (ASeM) of the Nigerian Stock Exchange (NSE). The ASeM provides a platform for small and mid-sized fast-growth companies to raise critical long-term capital at a relatively low cost to realize their business potential. According to the NSE, the ASeM is the essential market for entrepreneurial businesses to access a pool of investors that have the requisite appetite and understanding of their organizational needs.
Fakrogha who spoke with business a.m. at the local bourse recently, said Nigerian investors, must begin to think towards developing a business plan that can outlive them in other to assure business sustenance.
“A lot is being done to encourage most of this small scale firms. It’s our culture, in Nigeria, to be owners of our business, and we don’t want to expand. But we as operators have clients we are talking to. And the examples I normally give in those discussions are for my clients to look at the Unilever’s’ of today.
They started as Lever Brothers, even PZ started as one-man business, but over time the business grew beyond the founders. So that is why we encourage the average Nigerian investor to have a business plan that can outlive them, so that even when they have gone, their business can be sustained. And the only way you can be sustained is when your business is listed on the stock market,” he said. The major challenge that most small businesses across the world face, is the problem of finance.
They are also often times pressed out of business as a result of competition and lack of exposure. Fakrogha noted that the clamour for the growth of small businesses in Nigeria has been from the beginning of the stock exchange. “As far back as 1985, we have an alternative market for small firms and the management of the exchange have been ensuring that they do all that they can in making it sustainable.
The new management changed that market to the ASeM we know today and they tried to reduce some of the conditions and requirements for these companies to get listed. So you can now see that you don’t need to be a very big firm for you to be listed on the stock exchange. Once you have a small firm and you are ready to operate with good corporate governance and keep records of your performance the stock exchange is the place to be,” he said. Initiates Plc. recently got listed on the NSE.
It is the first waste management company to be listed on the Exchange and offers contracting and consultancy services in waste management, industrial cleaning and decontamination to private and public sectors including the oil & gas industry.
A look at the company’s financials shows a significant year-on-year improvement. For instance, the company recorded a 73 percent increase in its profit after tax of N39.4 million in the first quarter ended 31st March 2018 when compared to the same period of 2017. Total income also improved by 105 percent, in the same period under review. Total assets equally jumped to an all-time high of N1.3 billion having improved 42 percent from figures recorded a year earlier.