Thursday, July 11, 2019 /07:00PM / By Proshare Research / Header Image Credit: Voice of Nigeria
The issue of free float deficiencies of listed entities on The Exchange remained one of the critical listing requirements that is constantly reviewed.
Companies that are listed on The Nigerian Stock 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 free float requirement for companies under the various boards are as follows:
Companies with free float deficiencies do have the grace to apply for waivers from the Regulation Committee of the National Council of The Exchange (RegCom), and also provides compliance plans with tentative timelines to support their requests for waivers.
The RegCom, in return, considered and approved an extended timeframe for the companies to regain compliance with the listings requirement and are required to also provide quarterly disclosure reports to The Exchange detailing their level of implementation of the compliance plans.
A review of the list of companies with free float deficiencies on the NSE X-Compliance Report of July 5th, 2019 reflected that twenty-three (23) quoted companies currently makes the list with the likes of Lafarge Africa Plc, Ellah Lakes and Cement Companies of Northern Nigeria being the new set of companies to make the list.
Tourist Company of Nigeria Plc has the highest difference of 18.25% to meet up with its free float requirement. Cement Company of Northern Nigeria Plc followed with 17.03% difference.
Premium Board and Free Float
Further analysis on the list of the new firms
that made the list revealed that Lafarge Africa Plc is the only company listed
on the premium board of the Exchange that made the list
It will be recalled that we stated above that companies in the premium board requires a free float of a minimum of 20% of issued and fully paid up shares or the value of its free float is equal to or above N40 billion.
Analysis on the value of Lafarge Africa’s free float as at July 11th, 2019 put the figure at N35.59bn while its free float of 16.13% represents about 2.6bn shares.
4. X-Compliance Report: Early Filers and Defaulters as at 5th August 2016 – Aug 11, 2016
5. Level of Compliance and Free Float Deficiencies on NSE – Jun 07, 2016
6. DANGCEM, UBN and 9 Others Still Have Free Float Deficiencies – Jul 02, 2015
7. X-Compliance Report: NSE places Afroil Plc on Regulatory Delisting – Jul 09, 2013
8. Free Float Deficiencies: CHELLARAMS Yet to Comply as due date elapse – Mar 03, 2015
10. X-Compliance Report for period ending December 31, 2012 – Jan 01, 2013
11. NSE releases latest X-Compliance report – Nov 13, 2012