Bismarck Rewane, the chief executive officer (CEO) of Financial Derivatives Company (FDC), says the initial public offering (IPO) of Dangote refinery will nurture an investment culture among Nigerians, offering a “surer bet of getting revenues and dividends than gambling”.
Speaking on Channels Television on Friday, Rewane said the
target of attracting 10 million investors to the IPO would give the refinery
one of the largest shareholder bases in the world, making it a significant
milestone for the company.
“If you can get 10 million shareholders to participate in
the IPO, the Dangote refinery will have the largest number of shareholders in
the world. But that doesn’t mean the value of the investment,” the CEO said.
“But it is significant as we are developing and nurturing an
investment culture amongst Nigerians who, before now, spent almost 20 to 30
percent of their income at the bottom of the pyramid on gambling and on betting
for football.”
Rewane said investing in the refinery would offer Nigerians
an alternative to gambling, as investors would be putting their money into an
asset that is identifiable.
“It offers a surer bet of getting revenues and dividends
than the 0.0001 probability that you will get a football match or a wrestling
battle,” he said.
“The difference between a gambling act, a lottery act, and
an investment is that in one case, you are investing based on known parameters.
On the other one, you are actually just gambling and taking a chance.”
‘N5,000 DANGOTE REFINERY SHARES BETTER THAN SELLING PVC
FOR N15,000’
Comparing the projected 10 million shareholders with the
number of Nigerians who voted in the 2023 general election, the economist said
the IPO could also democratise Nigeria’s market and economic process by giving
more Nigerians an opportunity to own shares.
He said Nigerians would be better off investing their money
in shares than selling their permanent voter cards (PVCs) for short-term
financial gains.
“One is more, has a greater impact, that is the
democratisation of the market process, and that you are better off with your
N5,000 share than selling your PVC for N10,000 or N15,000 and consuming it,”
Rewane said.
“This is an investment which would translate itself in a
matter of two to three years to something as much as almost N300,000, if I’m
right.“
The FDC chief said the refinery’s IPO would also diversify
its shareholding and give more Nigerians an opportunity to participate in what
he described as Africa’s largest IPO.
“This is a great investment opportunity, and it’s going to
nurture investment culture for Nigerians,” he said.
“And, if you look at the 10 largest refineries in the world,
not one of them is in Africa. So this gives an opportunity for Dangute refinery
to be a hub for refining and marketing refined products for the whole of
central and west Africa.”
Rewane described the IPO as a “compelling investment
opportunity” that could generate returns for investors while increasing tax
revenue for the government.
The Dangote Petroleum Refinery and Petrochemicals officially
signed its IPO documents with investment banks and financial advisers on
September 7, ahead of its proposed opening on September 14.
The offer, expected to close on October 13, has a minimum
subscription of 10 shares, meaning investors can participate with N5,250, at an
offer price of N525 per share.
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