Stock & Analyst Updates | |
Stock & Analyst Updates | |
1696 VIEWS | |
![]() |
Thursday,
March 19, 2020 / 7:25 PM /
TheAnalyst / Proshare research / Image
Header Credit: EcoGraphics
Company's listed on the
Nigerian Stock Exchange (NSE) may soon find themselves shifting the dates of
their annual general meetings (AGMs) or simply craft intelligent ways of
holding such meetings in cyberspace. As the novel Coronavirus disease
(COVID-19) becomes widespread, governments globally are imposing new rules of social
gatherings with social distancing becoming the new normal.
Corporations intending to
hold mandatory meetings such as AGMs, extraordinary general meetings (EGMs) and
court ordered shareholders meetings may have to look for a "walk-around" arrangement that meets minimum legal requirements while still respecting the rules
of social distancing at a time of a pandemic virus spread. The
experience is new so, market stakeholders may need to make up the rules as they
go along (see table 1 below).
Table 1: New AGM Policy Measures
and Guidelines for Selected Countries
The New Social Normal
The
spread of the coronavirus across various countries and continents has caused fear
and pain. The adverse effect of COVID-19 is not limited to financial markets, other
markets such as have been commodity markets and supply chains have been
disrupted. The increasing rise of social
distancing challenges social and financial stability. In order to curtail
the disruption caused by the pandemic, some countries like the USA, Italy,
France and Spain have opted for partial lockdowns of their socio-economic networks
by restricting movement.
In a bid to prevent the spread of the virus,
the US Center for Disease Control and Prevention (CDC) recommended that no
gathering should have more than 50 people including weddings, festivals,
parades, concerts, sporting events or conferences and other types of
assemblies. In reaction to increases in the number of confirmed cases of COVID-19
in Nigeria the Lagos state, Ogun state, and Kwara state governments have barred
large gatherings using the same criteria as the USA Government.
Corporate
analysts have noted that companies listed on global stock exchanges are
required by law to hold annual general meetings annually to present their
statement of financial affairs to shareholders at least once a year. In
Nigeria, the Company and Allied Matters Act (CAMA) requires all Nigerian public
limited companies (PLCs) to hold AGMs within 15 months between the last AGM and
the next. However, with restrictions imposed on social gatherings as a result
of COVID-19 holding these meetings over the next few months will be difficult.
With
increase in restrictions and gatherings arising from the spread of COVID-19
suggestions on how companies can navigate the challenge. For example, in the U.K a guidance for
holding AGM in the midst of coronavirus was jointly produced by Slaughter
and May and The Chartered Governance Institute. The guidance offers five
(5) suggestions reflecting the UK company law and associated regulation. They
include adapting the basis on which you hold the AGM, delaying convening the
AGM, postponing the AGM (if permitted under the Articles), adjourning the AGM and conducting a hybrid
AGM (if permitted under
the Articles).
The regulatory arm of the Singaporean Exchange
also provided guidelines for listed companies or trust to hold their general
meetings amid the COVID-19 situation. Ten (10) measures were released by its
regulatory arm all of which could be classified under "adapting the basis on which you hold the AGM". Some of the
measures included;
In the light of the spread of COVID-19 in the US, the U.S Securities and Exchange Commission (SEC) issued guidance to assist public companies with upcoming annual general meetings. Some of the measures were;
The rise in the number of confirmed cases of coronavirus to twelve (12) in Nigeria has called for proactive measures or guidelines to be released regarding AGMs. The Nigerian Stock Exchange (NSE) on Thursday 19th March 2020 issued some guidance on the matter. Some of the guidance recommendations included:
Dead People Do Not Trade Financial Assets
The
new rules of business/social gathering may put a pause on intense shareholder
activity, but with COVID raging rampant, recent advisories by self-regulatory
organisations in the stock market is more than a passing comment, it requires
strict adherence as dead people do not trade financial assets.
Related Link: COVID-19: NSE Advises Companies to Put Adequate
Precautionary Measures In Place Ahead of 2020 AGMs
Related News
1.
VANLEER Postpones AGM Due to Corona Virus Outbreak
2.
Upcoming AGMs in 2015: Companies That Have Made it Known;
Expect More Soon
4.
NSE Amends Rules Relating to Board Meetings and AGMs; SEC
Nods
Related News
- #Coronavirus
1. COVID-19: NSE Advises Companies to Put Adequate
Precautionary Measures In Place Ahead of 2020 AGMs
2.
Can the Nigerian Economy Survive the Virus?
3.
What's
Really Happening In Oil Markets?
4.
COVID-19:
Lagos and Ogun States Ban High Density Social Gatherings
5.
Banks
Bring Down Cost-to-income ratios As Industry Margins Tighten
6.
NCDC
Releases Self Isolation Guidance for Nigerians
7.
COVID-19:
CBN to Inject N1trn Stimulus Across Critical Sectors of the Economy
8.
Coronanomics:
ICIEC Pledges $150m In Insurance Coverage For OIC Members
9.
Coronanomics:
Figuring Out CBN's Recent Policy Intervention
10. Oil
Price Plunge to Pressure US Energy States and Locals
11.
Coronavirus to Weaken Sovereign Fiscal Positions; Track
Record Matters
12. FG Restricts Entry Into Nigeria from 13 Countries;
Suspends Issuance of Visa on Arrival
13. UK Foreign Office Issues Travel Advice Against
Non-Essential Travel Worldwide
14. Fed Actions, US Banks Discount Window Use Prudent Amid
Turmoil
15. CBN Policy Measures In Response to COVID-19 Outbreak and
Spillovers
16. Coronavirus
Containment Actions Pose Material Risk to Global Structured Finance
17. Federal
Reserve Cut Rates to Support the Flow of Credit to Households and Businesses
18. World Bank Group Increases COVID-19
Response to $14bn To Help Sustain Economies, Protect Jobs
19. There
Is No Systemic Risk - Feedback From Goldman Sachs' Conference Call Held Sunday
20. Coronavirus
Containment Actions Pose Material Risk to Global Structured Finance
21. Africa CDC Policy Recommendation for AU Meetings and
Travel During COVID-19 Outbreak
22. Africa CDC Guidance on Community Social Distancing During
COVID-19 Outbreak
23. COVID-19 and the Nigerian Economy:
Backed to the Wall
24. Coronanomics: Inside Nigeria's Stock Market Response
25. Coronavirus: IsDB President Calls For Coordinated Efforts
To Tackle Pandemic
26. Coronavirus:
FG to Review Budget as Oil Price Plunges
27. Potential
Impact of the Coronavirus Epidemic: What We Know and What We Can Do
28. World Bank Group
Announces Up to $12bn Immediate Support for COVID-19 Country Response
29.
China's
Official Manufacturing Index Crashed from 50.0 to a Record Low of 35.7 In
February 2020
30.
FG
Inter-Ministerial Meeting Reviews Strategies On Containing Coronavirus
31.
Arbitrary
Increase in Prices of Protective and Hygiene Products on Account of Coronavirus
Concerns
32. Coronanomics:
Understanding The Darker Side of A Virus's Economic Downside
33. Coronavirus: Establishing The Nexus
Between A Bug and Global Equity Markets
34. WHO Director-General's Opening Remarks at the Media
Briefing on COVID-19
35. First Case Of Coronavirus Confirmed In Lagos
36. COVID-19 Refinancing Risk Elevated for 6% of Rated China
Corps
37. Global Ports Vulnerable to Coronavirus-Related Volume
Declines
38. The First Innovative Corporate Bond Supporting Anti-Epidemic
Is Given The Green Light To Issue
39. Coronavirus May Add to Liquidity Strain for Some APAC
Corporates
40. Coronavirus Set to Dampen China's Economic Growth
41. What Coronavirus Means for Investors
42. Coronavirus Raises Risks for China Toll Road Operators
43. Coronavirus Could Push Global Oil Market into Surplus
44. Airlines Face Growing Pressure From The Coronavirus
45. Coronavirus' Severity Will Frame Effect on Corps,
Sovereigns
46. China Government Suspend Equity Market Trading to Prevent
Sell-Off