Dipo Olowookere
By Dipo Olowookere
Extensions have been granted to six companies listed on the Nigerian Stock Exchange (NSE) which have free float deficiencies.
Firms listed on the NSE are required to maintain a minimum free float for the set standards under which they are listed in order to ensure that there is an orderly and liquid market for their securities.
According to the NSE, the free float requirement for companies on the ASEM Board is 15 percent of market capitalization, Main Board is 20 percent of market capitalization, while companies on the Premium Board is 20 percent of market capitalization or above N40 billion on the date the exchange receives the issuer’s application to list.
But some companies fall short of this requirement and as at last Friday, they were 15 in number and the erring companies risk being fined by the management of the stock market regulatory agency.
But Union Bank of Nigeria Plc, one of the companies on the list, having failed to fulfil this regulatory free float requirement, applied for an extension, which has now been granted.
According to the X-Compliance Report of the NSE analysed by Business Post, Union Bank has now been given till May 18, 2020 to meet up.
Also, Transcorp Hotels, another top company on the list, has till May 18, 2020 to adjust or risk being sanctioned.
e-Tranzact International Plc has till May 17, 2019; Great Nigeria Insurance Plc till May 18, 2020; Infinity Trust Mortgage Plc till May 17, 2021; while AG Leventis Plc has till October 19, 2020 to meet up.
Business Post reports that Union Bank currently has a free float of 14.94 percent, Transcorp Hotels 6 percent and e-Tranzact 10.06 percent.
In addition, Infinity Trust Mortgage has 3.50 percent, Great Nigeria Insurance 16 percent, while A.G. Leventis has 11.64 percent.
