In 2021, seven companies were delisted and three were listed on the Nigerian Exchange Limited (NGX), amid expectations that the stock market would end the year in the black.
In its Year-to-Date performance, the stock market before the two-day public holiday to mark the Christmas celebration stood at 4.95 percent.
However, four of the seven delisted companies were forced delisted by the Exchange’s management, while three voluntary delisted Capital market analysts, due to management’s decision to delist and failure to comply with the post-listing requirement.
According to Brandspur, Evans Medical Plc, Nigeria-German Chemicals Plc, Roads Nigeria Plc, and Unic Diversified Holdings Plc were delisted from the market for failing to comply with the post-listing requirement of timely filing of results.
In 2021, Studio Press Nigeria Plc, Union Diagnostic and Clinical Services Plc, and 11 Plc will all voluntarily delist from the Exchange.
Mr. David Adnori, Vice President of Highcap Securities, stated, “The stock exchange requires companies trading their stocks on its platform to regularly file their financial statements in order to provide shareholders and the investing public with information that allows them to make investment decisions.”
“When firms fail to submit their books for scrutiny, the exchange wields its big hammer, which usually takes the form of a sanction, and when it becomes consistent, the firms are shown the way out.”
Dr. Anthony Omojola, National Co-ordinator of the Independent Shareholders Association of Nigeria, stated that shareholders are concerned that more companies are delisted from the bourse than are listed.
“I predicted that more companies would delist from the NGX this year because regulators are not flexible in policies regarding sanctions, among other things,” he said. The business environment is not conducive to these companies expanding and profitably.”
Mr. Wole Adeyeye, analyst at PAC Holdings, stated that poor earnings due to poor corporate governance and economic factors impacted these companies’ failure to file results on time.
“Most of these companies were losing money, so delisting them was the best option.” We’ve seen cases where a company couldn’t meet the NGX listing requirements and had to switch to the NASD Exchange.
“On the NASD Exchange, I believe companies are only required to publish the annual report, whereas on the NGX, companies are required to update quarterly results, which may be a difficult task for some.” “Some companies delist due to regulatory decisions, management decisions to change the vision, and possibly an aspiration to go private.”
In the previous year, Ronchess Global Resources Plc, Briclinks Africa Plc, and Nigerian Exchange Group Plc were all listed by introduction, and Adeyeye stated, “We should have more than three listings on the NGX in a year.” The three listings are a positive step forward, but we can do better to attract more listings.”