The Nigerian Stock Exchange (NSE) is currently sheltering fifteen (15) listed companies with shortage in the free float of their stocks.
Free float represents the portion of shares of a company that are in the hands of public investors as opposed to locked-in stock(s) held by the promoters, company officers and controlling-interest investors.
At the Lagos Bourse, these companies’ shares are deficient in their free float: AG Leventis Nigeria Plc, Capital Hotel Plc, Caverton Offshore Support Group Plc, Champion Breweries Plc, Ekocorp Plc, e-Tranzact International Plc, Great Nigeria Insurance Plc, and Infinity Trust Mortgage Plc.
Others are Interlinked Technology Plc, The Tourist Company of Nigeria Plc, Transcorp Hotels Plc, Union Bank of Nigeria Plc, Portland Paints & Products Nigeria Plc, Global Spectrum Energy Services Plc, and Computer Warehouse Group (CWG) Plc.
In order to ensure that there is an orderly and liquid market for their securities, listed companies on the Nigerian Stock Exchange are required to maintain a minimum free float for the set standards under which they are listed.
The free float requirement for companies on the Alternative Securities Market (ASEM) Board is 15percent of their market capitalisation; for companies listed on the Main Board, their free float is 20percent of their market capitalisation; while free float of companies on the Premium Board is 20percent of market capitalisation or above N40billion on the date The Exchange receives the Issuer’s application to list.
Most of the earlier said companies with free float deficiencies have applied for waivers from the Quotations Committee of the NSE management and specifically provided compliance plans with tentative timelines to support their requests.
A.G. Leventis Plc with 11.64percent shares free float has till October 19, 2020 to comply with the NSE rules. Capital Hotel Plc, a company under regulatory watch has just 2.99percent of its shares in the hand of the public. It was given till October 31, 2017 to comply.
Also, Caverton Offshore Support Group Plc which has only 17.30percent of its shares in the hands of the public was given till October 31, 2017 to comply. Champion Breweries Plc has obtained Quotations Committee approval and is currently restructuring.
The company had 17.17percent of its listed stocks in the hand of investing public. Others are Ekocorp Plc with just 11.84percent of its shares in the hands of the public was given till October 31, 2017 to comply; while e-Tranzact International Plc which has 10.06percent of its shares in the hands of investing public has till May 17, 2019 to comply. Great Nigeria Insurance Plc has 16percent free float and was given till May 18, 2020 to comply.
The Company had concluded the first leg of the transaction and the NSE management had engaged the Company on the next stage. Interestingly, the shareholders of Great Nigeria Insurance Plc at its Extra-Ordinary General Meeting (EGM) held on Wednesday July 25, 2018 approved for the company to voluntarily delist its shares from the Nigerian Stock Exchange.
Infinity Trust Mortgage Plc has just 3.50percent of its share in the hands of investing public; the NSE gave it till May 17, 2021 to comply. Only 14.50percent of Interlinked Technology Plc shares are in the hands of investing public and the Exchange had given the company till October 14, 2017 to comply.
Another free float deficient company is The Tourist Company of Nigeria Plc with just 3.58percent of its shares in the hands of investing public. The Company is under Regulatory Watchlist and it is currently in the process of delisting its shares from the Nigerian Bourse.
Other companies with deficient free float include Transcorp Hotels Plc which has 6percent of its shares in the hands of the public; it has till May 18, 2020 to comply with the Exchange’s rules; Union Bank of Nigeria Plc has 14.94percent shares free float and has May 18, 2020 to comply while Portland Paints & Products Nigeria Plc has just 14.57percent of its shares in trading by the public and the NSE did not provide any answer on the company’s compliance due date. Same applies to Global Spectrum Energy Services Plc (7.01percent) and CWG Plc (15.97percent).
