Total number of 12 listed companies listed on the Nigerian Stock Exchange (NSE) are currently facing the challenge of meeting free float deficiency.
While some companies were yet to close the free float gab on or before the ended period granted them by the NSE, others have not demonstrated commitment to comply with regulatory requirement on this, just as the grace period given them is about to end.
The NSE x-compliance report as at 22nd August, 2017, showed that 12 companies have deficiency challenge in the number of shares they released to the NSE, as it falls below the regulatory provision.
The NSE’s X-Compliance report is a transparency initiative of The Exchange, which is designed to maintain market integrity and protect investors by providing compliance related information on all listed companies.
Companies that are listed on The Exchange are required to adhere to high disclosure standards which are prescribed in the Listing Rules.
According to the NSE X-Compliance, companies listed on The Exchange 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 NSE prescribes is 15 per cent of market capitalization, free float requirement for companies on the Alternative Securities Exchange Market (ASEM Board. Main Board is 20 per cent of market capitalization while companies on the Premium Board is also 20 per cent of market capitalization or above N40 billion on the date The Exchange receives the Issuer’s application to list.
Meanwhile, the companies in schedule 7 of the NSE X-Compliance with free float deficiencies have applied for waivers from the Quotations Committee of Management, having provided compliance plans with tentative timelines to support their requests.
The affected companies all of which are labelled BELOW Listing Standards (BLS) by the NSE, include Union Bank of Nigeria Plc with 14.94 compliance rate and 5.06 per cent deficiency. Its deadline for compliance according to the x-compliance report on August 22 2017, expired on 30 June 2017.
Ccapital Hotel has a free float of 2.62 per cent with deficiency of 17.38 per cent, and has been given 31 October, 2017, as compliance deadline, while Great Nigeria Insurance enjoyed free float of 16.00 per cent, and a deficiency of 4.00 per cent. The company’s compliance deadline expired on 08 July, 2016.
Chellerams with free float of 14.87 per cent and deficiency of 5.13 per cent, with extension period that expired on 08 July 2016
A.G. Leventis has a deficit free float of 11.64 per cent, while 31 July 2017, waiver period has expired.
Others are, Interlinked Technology, Infinity Trust Mortgage, Transcorp Hotels and Caverton Offshore Support Group.
They also include, African Paints, Champion Breweries, which is embarking on restructuring and the Tourist Company of Nigeria.