Why a Foreign Listing May Undervalue a Nigerian Company

Listing a Nigerian company on a foreign exchange may seem attractive because companies in wealthier countries often command higher valuations. However, investors will still judge the business largely by its revenue, growth prospects and the size of its main market. For companies whose customers and earnings are mainly in Nigeria, a foreign listing may not automatically deliver a premium valuation. Limited familiarity among overseas investors, lower trading activity and weaker revenue compared with local peers in developed markets could leave the shares undervalued. A stronger approach may be to build a solid track record in the primary market first, then consider a secondary listing abroad after meeting the relevant requirements. This can help the company establish credibility before seeking foreign investors.

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