NGX Reclassifies United Capital Stocks

August 31, 2021
Reclassifies United Capital

By Dipo Olowookere

The stocks of United Capital Plc have been reclassified by the Nigerian Exchange (NGX) Limited, a notice from the organisation has disclosed.

Shares of the company used to be under the low price stock level but they have now been upgraded to the medium price stock group in line with the pricing methodological framework of the exchange.

The reclassification of United Capital was carried out last Tuesday and it was because the equity price of the company’s stock has remained above the N5 price level for more than four months.

Equities on the exchange are put into three stock price groups of high-priced, medium-priced, and low-priced based on their market value.

In this regard, securities must have traded for at least four out of the most recent six-month period within a stock price group’s specified price band to be classified into the category.

Accordingly, a review of United Capital stock price and trade activities over the most recent six-month period provided the basis for reclassifying the security from the low-priced stock group to the medium-priced stock group.

This is because the share price of the firm appreciated above the N5 price band on March 19, 2021, and traded above N5 up till the close of business on July 30, 2021, indicating that its equity value has remained above N5 for at least four months out of the last six months.

The exchange noted that this reclassification also necessitated the attendant change in the tick size change from N0.01 kobo to N0.05 kobo in line with Rule 15.29: Pricing Methodology, Rulebook of The Exchange, 2015 (Trading License Holders’ Rules).

“Trading license holders are hereby notified of the reclassification of United Capital Plc from the low-priced stock group to the medium-priced stock group, in line with the NGX’s pricing methodology framework,” a part of the circular read.

“United Capital Plc stock price appreciated above the N5 price level on March 19, 2021, and traded above N5 up till close of business on July 30, 2021.

“This indicates that United Capital Plc stock price has traded above N5 in at least 4 months out of the last 6 months.

“Resultantly, United Capital Plc has been reclassified from the low-priced stock group to the medium-priced stock group with effect from August 24, 2021,” another part of the notice said.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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