A total of seven companies delisted and three were listed on the Nigerian Exchange Limited (NGX) in 2021 amid expectation that the stock market might close the year positive.
The stock market before the two-day public to mark the Christmas celebration in its Year-till-Date performance stood at 4.95 per cent.
However, out of the seven delisted companies, the management of the Exchange forcefully delisted four, while three voluntary delisted
Capital market analysts, to management decision to delist and failure to comply with the post-listing requirement.
As gathered, the likes of Evans Medical Plc, Nigeria-German Chemicals Plc, Roads Nigeria Plc, and Unic Diversified Holdings Plc were forcefully delisted from the market for not complying with post-listing requirement of promptly filing of results.
Studio Press Nigeria Plc, Union Diagnostic and Clinical Services Plc, and 11 Plc voluntary delisted from the Exchange in 2021.
The Vice President, Highcap Securities, Mr. David Adnori said: “The stock exchange requires companies trading their stocks on its platform to regularly file their financial statements to enable shareholders and the investing public to have information that would enable them to make investment decisions.
“When companies fail to submit their books for scrutiny, the exchange uses its big hammer, which usually comes in a form of sanction and when it becomes consistent, the firms are shown the way out.”
The National Co-ordinator, Independent Shareholders Association of Nigeria, Dr. Anthony Omojola said shareholders are concerned that more companies delisted from the bourse than new listings.
According to him: “I predicted that more companies are going to delist from the NGX this year because the regulators are not flexible in policies as regards sanctions, among others. The business environment is not friendly to allow these companies to expand and make profit.”
Analyst at PAC Holdings, Mr. Wole Adeyeye said the poor earnings due to weak corporate governance and economy factors impacted on these companies late filing of results at the stipulated time.
“Most of these companies were reporting losses and delisting them was the best thing. We have seen situations where the company cannot meet NGX listing requirements and moved to NASD Exchange.
“On the NASD Exchange, I think companies are meant to publish only the annual report but on the NGX, companies are meant to be updating quarterly results which to some it might be a very tasking demand.
“Some companies do delist due to regulatory decisions, management decisions to change the vision and maybe had an aspiration to go private.”
In the year under, Ronchess Global Resources Plc, Briclinks Africa plc, and Nigerian Exchange Group Plc were all listed by introduction,
Adeyeye noted that: “We should be having more than three listings in a year on the NGX. The three listings is a welcome development but we can do better to attract more listings.