By NKIRUKA NNOROM
Capital market operators have thrown their weight behind the Nigerian Stock Exchange’s planned delisting of nine moribund companies from the Exchange’s official list, saying that it was a commendable move.
The Managing Director/CEO, Trust Yield Securities, Alhaji Rasheed Yussuff, said the plan to delist non-performing stocks by the NSE was an additional confidence building factor for the market.
He added that it would improve sanity in the market as both operators and investors alike would know that the NSE was serious with compliance to entrenched rules of the system.
“We all have been taking about enforcement of rules and regulations. If we believe that enforcement is a proper thing to do and some quoted companies are not living up to the post listing rules requirements of the Exchange, then delisting them will be a proper thing to do to safeguard investors,” he stated.
Besides, he stated that the action if executed would send a signal to the investing public that only competent companies that meet the rules of the Exchange are listed, saying that it would give them the assurance that they are not putting their money in wrong place.
Speaking in the same vein, the Managing Director, Lambert Trust & Investment Co. Limited, Mr. David Adonri, said any security that fails to meet the post-listing rules of the NSE was not fit to remain quoted, stressing that continued existence of such securities on the Daily Official List of The Exchange poses grave risk to the investing public.
On his own part, Mr. Johnson Chukwu, MD/CEO Cowry Asset Management Limited, observed that delisting of companies that have failed to comply with the post listing requirements of the Nigerian Stock Exchange would help send the right signal to both the listed companies and other market participants.
He explained that quoted companies, for instance would henceforth realize that the Exchange is serious with the enforcement of its standards, adding, “Consequently we should see some improvements in the reporting standards and other compliance issues.
“On the part of other market participants, it will help bolster investor confidence on the reliability and integrity of publish financial statements,” he stated.
The NSE had announced its intension to delist nine companies that have not been meeting its post listing requirement in November, 2012.
To be delisted from the daily official list in November, this year, according to the NSE are the shares of Aluminum Manufacturing Company of Nigeria Plc, Capital Oil Plc and W.A. Glass Industry Plc. Other companies are: Union Dicon Salt Plc, Hallmark Paper Products Plc, Nigeria Wire Industry Plc, Rokana Industry Plc, Lenards Nigeria Plc and Udeofson Garment Factory (Nig) Plc.
According to NSE, the resolve to delist the companies was endorsed by its council due to their persistent non-compliance with the post-listing rules of the Exchange.”