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Transcorp Hotels Plc, Union Bank of Nigeria Plc, A.G. Leventis Plc, E-Tranzact International Plc, Great Nigeria Insurance Plc and Infinity Trust Mortgage Plc are among the Nigerian Stock Exchange (NSE) listed companies with tradable shares below the required number available for trading.
These companies and others are identified in the X-Compliance Report, 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.
The aforementioned companies have free float deficiencies and applied for waivers from the Quotations Committee of Management (QCM) at the NSE which specifically provided them compliance plans with tentative timelines to support their requests, the NSE notes.
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.
Free float is the percentage of outstanding shares that are actually available in hands of investors for trading.
The NSE free float requirement for companies on the Alternative Securities Market (ASEM) Board is 15percent of market capitalisation, Main Board is 20 percent of market capitalisation while companies on the Premium Board is 20percent of market capitalisation or above N40 billion on the date The Exchange receives the Issuer’s application to list.
Currently, the number of Transcorp Hotels Plc shares that are actually available for trading is just 6percent of its market capitalisation and this company has been given till May 18, 2020 to meet the 20 percent requirement.
Also, the number of Union Bank of Nigeria Plc shares available for trading is just 14.94 percent of its market capitalization and the company has till May 18, 2020 to achieve the 20 percent requirement.
The number of A.G. Leventis Plc shares available for trading by investors is 11.64percent of its market cap and the NSE has given the company till October 19, 2020 to meet the 20 percent requirement.
“The Quotations Committee of Management considered and approved an extended timeframe for the companies to regain compliance with the listing requirement. The companies are however required to also provide quarterly disclosure reports to the Exchange detailing their level of implementation of the compliance plans”, the NSE stated in the report.
E-Tranzact International Plc with 10.06percent of free float has till May 17, 2019 to achieve 20percent minimum requirement; Great Nigeria Insurance Plc which has concluded the first leg of the transaction and NSE management engaged the Company on the next stage has till May 18, 2020 to achieve 20percent free float from current 16percent; while Infinity Trust Mortgage Plc with just 3.50percent free float has till May 17, 2021 to achieve the 20percent minimum requirement.
Capital Hotel Plc, a company under Regulatory Watchlist has 2.62percent free float and the timeline given to it for compliance with ASeM 15percent minimum requirement elapsed on October 31, 2017. Others are: Champion Breweries Plc (17.30percent free float). The company has obtained QCN approval and is currently restructuring, and the Tourist Company of Nigeria Plc with 3.58percent free float is under Regulatory Watchlist.
Iheanyi Nwachukwu
