Total equities on the trading floor of The Nigerian Stock Exchange (NSE) have dropped by 3.1 per cent in three years to 190, checks by Business247 have revealed.
Data gathered by our correspondent revealed that equities on the secondary market in 2013 stood at 198. A year later, it dropped to 196 and in 2015, it moved to 190.
The Stock Market under Mr. Oscar Onyema as the Chief Executive Officer has recorded forcefully delisting of several companies on the heels of non-disclosure of audited accounts and some voluntary delisting.
For Instance, West African Aluminium Plc and Nigerian Wire Industry Plc were delisted by the bourse in 2013.
The likes of Big Treat Plc, Afroil Plc, Starcomms Plc, Pinnacle Point Group, Poly Products Plc and Cappa and D’alberto voluntary delisted on the backdrop of macro economy challenges and strict post listing requirement of NSE.
In April 2014, the market saw its first Initial Public Offer (IPO) since the market melt down of 2008 with primary listing of Seplat Petroleum Development Company Plc’s shares on the Main Board at N576 per share.
Market analysts said the equities market recently has suffered from macro economy challenges that have plunged the market to negative. They said companies in the oil & gas and telecommunication can only show interest when the capital market is vibrant.
The Managing Director, APT Securities and Funds Limited, Mr. Kasimu Kurfi, in a chat with Business247, welcomed the decision of NSE management to delist some inactive companies.
According to him, “the management of NSE has gradually delisted some companies because of non-compliance with listing requirement. If we have only 190 equities that are actively traded, it is good for our capital market.
“Mind you, only 50 equities on The Exchange control 90 per cent of the market capitalisation which is an indication we do not need large numbers of listed equities.”
He expressed that the capital market must be vibrant for companies in the real sector to show interest of listing.
Kurfi said, “With the new Central Bank of Nigeria (CBN) flexible foreign exchange policy and deregulation in the downstream sector, companies that tend to expand their business operations will show desire of coming to the equities market.
“If the likes of MTN Nigeria that has shown desire to list, I believe that other companies in that sector will do the same sooner or later,” he added.
Another stockbroker said challenges in the global economy that include dwindling oil prices and uncertainty in commodity products have scare companies away from the equities market.
He stressed that government participation in the capital market is the only chance new company can show interest of listing on The Exchange.
He said, “Government needs to show desire of reviving the economy and showing seriousness about what the capital market can contribute to the nation’s economy. Also, government needs to make it a policy that companies operating in the country must become a public company through listing on the Exchange.
“By so doing, more companies will be listed and wealth will be created when those companies are paying good dividend.”
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