Many non-dividend paying companies listed on the Nigerian Stock Exchange (NSE), without growth in equity prices may soon voluntarily delist form the exchange.
Cross section of stakeholders revealed this to Daily Times.
They asserted that earnings drive investment and once equity price of a none dividend paying company fails to rise over a long period, the only option would be to delist and the challenge of meting post listing rules.
Investor sentiment in the Nigerian capital market, the stakeholders said, would, for a
long time, continue to drive preference for stocks, and would be tied to corporate culture and equity price appreciation.
The stakeholders said that dividend payment culture and price appreciation would for a long time, continue to drive investors preference for shares, hence earning opportunities remains primary aim of investing.
They said that irrespective of the recurring crime rates in the market ostensibly tied to some stock broking houses and registrars, the inactivity nature of some companies listed on the Exchange, reduced investment opportunities in the market as well as earning opportunities,
A retail investor who preferred to speak on condition of anonymity, said that the market current trend could in the foreseeable future see voluntary delisting of many listed companies, having failed to register equity price increase and dividend payment over a long period.
“Before people will buy shares, they will look at your dividend history, board and your levl of price growth. Non dividend paying companies without potential for equity price growth will be forced to delist,” a stakeholder said.