NSE Delists 37 Quoted Companies In Five Years
A total of 37 quoted companies have been delisted from the capital market by the Nigerian Stock Exchange (NSE) between 2016 and 2020.
Data obtained from the NSE shows that the companies were delisted due to merger, voluntary and NSE regulatory reasons.
Of the 37 delisted quoted firms in the last five years, five companies had their names removed from the equity market between January 7 and November 5, 2020, representing 13.5 per cent of the total.
Fifteen of the companies were delisted in 2016, six in 2017, four in 2018, and seven in 2019, representing 40.5 per cent, 16.2 per cent, 10.8 per cent, 18.9 per cent of the total firms delisted, respectively.
Top on the list of quoted firms voluntarily delisted are: Law Union and Rock Insurance (November 2020), Continental Reinsurance Plc (Jan 2020), A.G Leventis Nigeria Plc (Jan 2020), Dangote Flour Mills Plc (Nov 2019), First Aluminum Nigeria Plc (July 2019), NewRest ASL Nigeria Plc (May 2019), Great Nigerian Insurance Plc (Jan 2019), Paints and Coatings Manufacturers Nigeria Plc (August 2018), Seven Up Bottling Company Plc (2018), and Avon Crowns Cara Containers Plc (September 2017).
Companies delisted for one NSE regulatory reason or the other included Anini International Plc (October 2020), Skye Bank Plc (August 2019), Fortis Micro Finance Bank Plc (August 2019), Afrik Pharmaceutical Plc (April 2018), African Paints Nigerian Plc, (April 2018), and Avon Crowns Cara Containers Plc (September 2017).
Others are: Beco Petroleum Products Plc (May 2017), Mtech Communication Plc (May 2017), MTI Plc (May 2017), UTC Plc (May 2017), Lennard Nigeria Plc (Dec 2016), P.S Mandrides & Company Plc (Dec 2016), Premier Breweries Plc (Dec 2016), Constain WA Plc (Dec 2016), Navitus Energy Plc (Dec 2016), Nigerian Ropes Plc (Dec 2016), IPWA Plc (May 2016), G. CAPPA Plc (May 2016), West African Glass Industry Plc (May 2016), Investment and Tallied Insurance Plc (May Alumaco Plc (May 2016), Jos International Breweries (May 2016), Adswitch Plc (May 2016), and Rokanna Plc (May 2016).
However, some companies were delisted after merging with other quoted companies. These companies include: Cement Company of Northern Nevada Plc which merged with BUA Cement Plc (formerly OBU Cement Company Plc) and got delisted in January 2020.
In April 2019, Diamond Bank, a one time capitalized equity was also delisted following its merger with Access Bank, while Ashaka Cement Plc merged with Lafarge Africa Plc and left the stock market in July 2017.
In the same vein, Vono Products Nigeria Plc got delisted in May 2016 after it merged with Vitafoam Nigeria.
An accountant and capital market analyst, Orobosa Irowa, explained that the delisting of a firm from the stock market could range from different reasons.
He said, “The Nigeria Stock Exchange, as you know, is the regulatory body of the capital market. It looks out for the public and shareholders. So, if a company is falling short of regulatory standards, it could be delisted in order to protect shareholders.
“There is also what is called internal dealings or inside trading, which the exchange could perceive as fraud and there are sanctions attached to such dealings. In a whole, if the stock exchange finds a, quoted company guilty of any infringement, such falls under what the regularity body could classify as NSE regulation.”
Irowa further said, “Mind you not all delisted companies are folding up or closing business. A company can decide to go into voluntary delisting from the market, meaning it want to stay away from the public radar. You know a listed company is a public company and it must notify the NSE and the general public on its affairs and account.
“Not every company can afford to do this in a long time. They can choose to go into voluntary delisting. May be the company has lost value and can’t keep up with the industry standard anymore.”
On the consequences of being delisted and still operating, he said, “once a company get delisted, it loses some level of goodwill. It means something must have gone wrong somehow.”
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