15 firms’ exit costs stock market N24.075bn in one year

The removal of 15 erstwhile quoted companies from the official register has had a negative impact on the Nigerian Stock Exchange, STANLEY OPARA writes

The delisting of 15 companies from the Nigerian Stock Exchange in 2016 took away N24,075,418,729.61 capital from the market, findings by our correspondent have shown.

The 15 firms left the market for various reasons such as voluntary intent, regulatory directive, and mergers and acquisitions.

Those affected are G. Cappa Plc, IPWA Plc, West African Glass Industries Plc, Investment and Allied Insurance Plc, Alumaco Plc, Jos International Breweries Plc, Adswitch Plc, Rokana Plc and Vono Products Nigeria Plc.

Others are Lennards (Nigeria) Plc, P.S. Mandrides and Company Plc, Premier Breweries Plc, Costain West Africa Plc, Navitus Energy Plc and Nigerian Ropes Plc.

The market capitalisation of the respective firms as of the time of delisting was given as N1.717bn, N257.07m, N131.427m, N14bn, N557.201m, N809.280m, N203.758m, N30m, N484.74m, N210.492m, N214m, N2.888bn, N542.191m, N62.118m and N1.966bn, respectively.

Vono Products Plc was delisted after its merger with Vitafoam, while the others were delisted as a result of non-compliance with their post-listing obligations.

However, the NSE only succeeded in listing one firm throughout 2016. The firm listed was a Port Harcourt-based industrial cleaning, contamination and waste management company known as The Initiates Plc.

Specifically, the company was listed by the introduction of 889,981,552 ordinary shares of 50 kobo each on the Alternative Securities Market Board at the price of N0.85 per share.

The outstanding shares for each of the delisted companies, according to the NSE, are 125,000,000; 514,140,713; 208,614,500; 28,000,000,000; 75,604,049; 562,000,000; 125,005,250; 50,000,000; 563,651,183; 70,164,062; 40,000,000; 979,211,412; 1,084,382,980; 98,600,000; and 263,668,295, respectively.

As part of efforts to further improve market transparency and integrity, provide timely information for investment decisions as well as enhance the protection of investors in the capital market, the NSE last year commenced the use of enhanced Compliance Status Indicator codes on the ticker tape for listed companies. This became effectively on May 9, 2016.

Under this initiative, the Exchange tags all listed companies with a three character code that indicates their compliance status at any particular point in time. This compliance code enables investors to make informed decisions, while ensuring a transparent market guided by timely information.

The General Counsel and Head of Regulation, NSE, Ms. Tinuade Awe, said, “The revision of the existing codes and introduction of new CSI codes complement existing compliance structures of the Exchange and it will work in tandem with the X-Compliance Report, which we publish weekly on our website.

“This initiative of the Exchange, which is in line with global best practices, is designed to maintain market integrity and protect the investors.”

The Executive Director, Market Operations and Technology, NSE, Mr. Ade Bajomo, also said, “We are implementing the CSI code to improve the quality of our market data as well as ensure transparency in providing compliance related information about listed companies.

“The delivery of market data and associated services is an essential building block in the Exchange’s strategy as it seeks to reach a wider audience to improve market integrity and facilitate informed investment decision making.”

The Chief Executive Officer, NSE, Mr. Oscar Onyema, recently said the market would be listing more firms this year. Already, the Exchange has listed five securities this year.

“We expect investors to continue to keep a close eye on the divergence between the interbank foreign exchange rate and other exchange rates in the country. Accordingly, a convergence of forex rates in the country and the performance of listed corporates will determine the level of market activity in the short term,” Onyema added, noting that the NSE would be introducing more tailor-made products for investors