Delistings: NGX Tasks Government on Business-Friendly Policies

November 17, 2023
MTN Capital Markets Day Business-Friendly Policies Delistings

By Aduragbemi Omiyale

The Nigerian Exchange (NGX) Limited has charged the government to work more on advocacy and policymaking to cut down the number of delistings in the stock market.

In the past few years, there had been the delisting of companies from the bourse, though the chief executive of the exchange, Mr Temi Popoola, said this is not peculiar to Nigeria.

Speaking at the MTN Capital Markets Day in Abuja on Tuesday, Mr Popoola said some global stock exchanges have been battling with the delisting of companies.

“There has been quite a bit of news lately about delistings in our market, and that is a trend we are seeing not just in Nigeria but on major exchanges globally. Take Johannesburg, for instance; it has been struggling with delistings,” he said.

The capital market expert further said globally that Initial Public Offerings (IPOs) have witnessed a slowdown of more than 60 per cent in the last two years, according to market data provider PitchBook.

He also said there has been a noticeable scarcity of smaller cap stocks on public exchanges due to various factors such as voluntary and involuntary delistings, mergers and acquisitions, and liquidations.

However, he said Nigeria has been lucky to have the listing of new firms on the bourse, increasing the market capitalisation by over 10 per cent in the past two years, underscoring NGX’s growing prominence as a preferred destination for corporate listings and capital raising.

Mr Popoola said the exchange has been making efforts to replace delistings faster than they occur as its counterparts in other places do.

“What most exchanges aim to do is replace those delistings faster than they occur, and that has formed the crux of our strategy at NGX.

“We have had notable listings within the last two years including BUA Foods, Geregu – which is our first power sector listing, MeCure Industries, VFD Group, and interestingly our first listed Investment Trust, Nigeria Infrastructure Debt Fund,” he said.

But he argued that with good government policies, more companies would be encouraged to list their shares on the stock exchange.

Drawing on historical examples, he highlighted the transformative impact of government interventions through policy changes, citing the banking sector and pension reforms of 2004 as notable instances that have positively influenced market growth.

“As NGX continues to position itself as a dynamic and resilient exchange, the commitment to proactive strategies and collaboration with government initiatives remains at the forefront,” Mr Popoola noted.

Aduragbemi Omiyale

Aduragbemi Omiyale is a journalist with Business Post Nigeria, who has passion for news writing. In her leisure time, she loves to read.

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