In a sign that the Nigerian Stock Exchange (NSE) is waking up from its slumber, it on Friday issued a notice suspending trading in the shares of 17 companies for non submission of their results.
It claims the suspension is in line with its guidelines which gives it the powers to suspend any quoted company that did not release its results within a stipulated period.
The suspension is effective July 5th 2017 and includes a list of 17 companies out of which 7 are insurance firms. The NSE also reveals that the suspension will remain in place until the submission and approval of the required results by the exchange.
The suspended companies are listed below.
1. African Alliance Insurance Plc
2. Equity Assurance Plc
3. Fortis Microfinance Bank Plc
4. Guinea Insurance Plc
5. Premier Paints Plc
6. Resort Savings & Loans
7. Sovereign Trust Insurance Plc
8. African Paints (Nigeria) Plc
9. Aso Savings & Loans Plc
10. Ekocorp Plc
11. Evans Medical Plc
12. Goldlink Insurance Plc
13. Great Nigeria Insurance Plc
14. Omatek Ventures Plc
15. Union Dicon Salt Plc
16. Union Homes Savings & Loans Plc
17. Universal Insurance Company Plc
On the suspension
The NSE has been criticized by a section of investors (Nairametrics inclusive) for taking too long to wield the big stick on rogue listed companies who continue to flout listing rules, despite the obvious risk they pose to investor funds. The Nigerian Stock Exchange has had a history of seeing quoted companies that are yet to release any result embark on bullish runs leading to gains of over 100% in some cases. Union Dicon, which is included in this list, some mid 2016 rallied from about N10 t0 N17 despite not having released its results. It is often considered an anomaly for a listed company that has failed to produce any results or corporate action for years, suddenly see its share price mount a bullish run.
We now hope that this step in the right direction will be sustained.
Will the suspension be lifted ?
Eventually after the companies have paid the required fines and submitted their results, the suspension will be lifted. Since some of the companies have their results pending before regulators, they may remain suspended on the exchange for a while.
Can I buy or sell during suspension
Shares of any of these companies cannot be traded on the Nigerian Stock Exchange during the period of the suspension. If you own these shares and wish to sell, you will not be able to sell.
What if the companies never get to lift their suspension?
If this occurs the NSE will have no choice but to delist these companies from the exchange. Therefore, if you were to sell the shares, it will have to be either crossed or sold on the NASD (a market where unlisted shares are traded).
Here is a copy of the press release.