Non-compliance: NSE delists 22 companies
Owing to the failure to meet the required post-quotation standards, the Nigerian Stock Exchange (NSE) has delisted 22 companies between 2016 and 2017.
Delisting is the process of removing a company from the official list of the Stock Exchange, either voluntarily or by compulsion.
Under a voluntary delisting, a quoted company can decide to delist from the exchange due to reasons such as merger/acquisition. On the other hand, the NSE can compulsorily delist a firm when it fails to meet up with post-quotation standards.
According to Data obtained from the Exchange’s website, the delisted companies are: Cappa and D’Alberto, Intercontinental Bank Preference shares, IPWA, G Cappa and West African Glass Industries. Others were Investment & Allied Insurance, Alumaco, Jos International Breweries, Adswitch, Rokanna, Vono Products, Lennards Nigeria, P.S. Mandrides & Company, Premier Breweries, Costain, Navitus Energy, Nigerian Ropes, Beco Petroleum, M Tech Communication, MTI, UAC and Ashaka Cement, however, Seven-Up Bottling Company, African Paints and Afrik Pharmaceuticals were delisted in 2018.
The exchange, however, listed only five new companies: The Initiatives, in 2016, while Transcorp Hotels, Global Spectrum Energy Service, Jaiz Bank and Med-View Airline were listed in 2017.
Speaking to journalists during the NSE 2017 market recap and 2018 outlook earlier this year, the CEO of the bourse, Oscar Onyema, said that companies in their life cycle would be listed, while others would be delisted over time, adding that the development was the reality that exchanges around the world experienced.
“Companies will delist for different reasons from voluntary to regulatory delisting, mergers and acquisitions and other things that would cause them to delist and our job is to make sure that we make it easy for companies to come in and if they want to leave, that they leave in an orderly manner. So, what we have tried to do with our listing rules in the last one to two years is that we have tried to enhance the rules to ensure that companies behave in an orderly fashion.” he explained.
Also speaking on the issue, Chief Executive Officer, Cowry Assets Limited, Johnson Chukwu, explained that some of the companies have realized that one of the major reasons for listing, which is access to equity capital, is not forthcoming due to investor apathy amidst the current economic realities.
“Take for instance the issue of Coca-Cola that delisted, one of the reasons for its delisting was that they could no longer borrow locally because the cost of borrowing locally were quite high.”