By Dipo Olowookere
There is anxiety in the air as the Friday, June 30, 2017 deadline given to Union Bank of Nigeria by the Nigerian Stock Exchange (NSE) to rectify its free float deficiency draws nearer.
At the moment, it is not certain if the lender will meet up with the deadline or approach the stock market regulator for a further extension.
Union Bank now only has 19 days to the meet up or incur the wrath of the NSE. Alternatively, the bank can opt for migration to the NSE’s Alternatives Security Market (ASeM).
Companies listed on the bourse 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.
The free float requirement for companies on the ASeM board is 15 percent of market capitalization, while main Board listing 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 NSE receives the issuer’s application to list, Daily Times said in its report.
But Union Bank’s free float currently stands at 14.94 percent, below the 20 percent benchmark. The financial institution tops the 10 firms listed in schedule 7 of the X-Compliance Report of the NSE, all of which were labelled below listing standard (BLS).
Others with free float deficiencies include, Capital Hotel, Great Nigeria Insurance, Chellerams, A.G. Leventis, Interlinked Technology, Infinity Trust Mortgage, and Caverton Offshore Support Group.
According to Daily Times, the lender currently has 5.06 percent shares value of its market capitalization to provide to the market in order to sustain its status in the NSE main board, to ensure orderly and liquid marketing its securities.
The June 30 deadline, it was gathered, was part of early extension granted to the bank “The Quotations Committee of Management considered and approved an extended timeframe for the companies to regain compliance with the listing requirement.
“The companies are however required to also provide quarterly disclosure reports to the NSE detailing their level of implementation of the compliance plans” the exchange stated in schedule 7 of the x-compliance report.
Additional information from Daily Times
Adedapo Adesanya