Seven companies have been on the delisting radar of the Nigerian Stock Exchange (NSE) for over two years (since December 2019).
They are Evans Medical Plc, Tourist Company of Nigeria, Unic Diversified Holdings Plc, Nigerian German Chemicals Plc. Others are Roads Nigeria Plc, Omatek Ventures and Deap Capital Management & Trust.
This was obtained from the NSE’s X- compliance report.
According to the report, the companies have been either in the process of delisting their issued shares from the bourse or on the delisting watchlist of the Exchange.
What is NSE saying
The Regulation Committee of the National Council of The Exchange (RegCom) has approved for the Exchange to proceed with the delisting process of Evans Medical Plc, Tourist Company of Nigeria, Unic Diversified Holdings Plc, Nigerian German Chemicals Plc, and Roads Nigeria Plc since last December.
On the other hand, Omatek Ventures and Deap Capital Management & Trust have been placed on the NSE’s delisting watch-list over their failure to comply with some post-listing requirements, including failure to file their quarterly and annual reports within a stipulated time.
Why it matters
There are two main reasons why companies delist from the NSE or are forced to delist from the market.
The first one entails punishment for companies that violate NSE’s listing rules.
The NSE periodically fines defaulting companies, whilst demanding that such companies address their corporate governance lapses.
As Nairametrics reported in 2020, the latest X-Compliance report showed that the NSE made as much as N154 million by imposing fines on defaulting companies.
But sometimes, fines are not enough. The NSE is often forced to voluntarily delist companies whose infractions have become persistent.
On the other hand, a good number of companies have also voluntarily delisted from the NSE for various reasons, including the desire to become privately owned entities.
What you should know
In the case of Omatek Ventures, the company’s fate has been dwindling since the departure of its founder, Dr Florence Seriki.
According to a development bank, the company has allegedly not been able to service the N5.81 billion which it obtained in 2012. The bank disclosed that several measures had been employed to ensure that Omatek kept to the loan agreement, all to no avail.
One of such efforts was the appointment of Ade Oyebanji as a receiver, who took inventory of all items located at Omatek’s premises at Plot 11, Kudirat Abiola Way, Oregun, Ikeja, Lagos, in January 2017.
Summary of the loan detail
In December 2012, the Bank of Industry loaned Omatek Ventures N5,808,429,033.95 in a term loan and working capital facilities agreement. The loan was disbursed to finance the procurement of assembly components for the production of laptops.
Also, as part of the requirements for obtaining the loan, the development finance bank said that it requested an Irrevocable Standing Payment Order arrangement with the defunct Skye Bank Plc in favour of BoI, all assets debenture, and an Irrevocable Personal Guarantee of the late Seriki.
Evans Medical Plc is a Nigerian pharmaceutical company that was established in 1954 and listed on the Nigerian Stock Exchange in 1979. Over the years, the company has been plagued by many challenges, ranging from increasing competition to corporate governance lapses.
The latest NSE X-Compliance report indicated that the company has not submitted any quarterly financial statement from 2016 to 2020. At this rate, the NSE may have no choice but to forcefully delist the company.
Nigeria-German Chemicals Plc
Nigeria-German Chemicals Plc has also not been obeying the listing rules of the NSE. The latest NSE X-Compliance report also noted that the company had not filed any financial statement since Q3 2014 till date. It will not come as a surprise if the company is delisted from the Nigerian bourse any moment from now due to regulatory reasons.
Note that the company is a chemical/healthcare company that was incorporated in 1964. It was initially known as Nigerian Hoechst Plc before it rebranded and changed to its name in 1995. It was listed on the NSE in 1979.
Nigerian stocks that outperformed Bitcoin, Ethereum and Cardano in April
According to data tracked on the NSE, the shares of Japaul Gold and Ventures Plc, Meyer Plc and University Press Plc delivered better returns than Bitcoin, Cardano, Ethereum.
The recent crypto-mania has presented investors who are nervous about the stock market with key opportunities to capitalize on, through alternative investments in cryptocurrencies.
The attendant effect of this led to the move which saw the total market capitalization of Bitcoin, Ethereum, Litecoin, XRP and other crypto assets surge above the $400 billion mark in Q4 2020 to more than $2 trillion in recent times – the total market capitalization of all cryptocurrencies are valued at about $1.74 trillion as of the time of drafting this report.
Despite the gains Bitcoin, Ethereum and Cardano delivered to their holders, the market performance of these digital assets since the beginning of April has been comparatively unimpressive. Of the three cryptocurrencies, only Ethereum maintains month to date gains in excess of 15%, while the month to date losses in others stand in excess of 12%.
The performance of these digital assets so far in April
Data tracked on Binance, a cryptocurrency exchange that provides a platform for trading various cryptocurrencies revealed that Ethereum’s month to date gains in the month of April is put at about 15% while the month-to-date loss of Bitcoin and Cardano is put at about 16% and 12% respectively.
Stocks on NSE delivered decent returns in the month of April, outperforming some cryptos. Some stocks on the Nigerian Stock Exchange have delivered impressive returns for their holders in the month of April, despite the recent lacklustre state of key shares listed on the exchange.
According to data tracked on the Nigerian Stock Exchange, the shares of the following companies have delivered better returns than Bitcoin, Cardano, Ethereum and some other cryptocurrencies so far in this month.
Japaul Gold and Ventures Plc
(JAPAULGOLD), MtD gains: 46.83%
The rebranded and restructured mining company with a key focus on gold and other solid minerals exploration is the best-performing stock on NSE this month with a month to date gain of about 46.83%.
Despite the fact that the stock is currently trading slightly below its open price of N0.62 per share for the year, it has risen from a YTD low of N0.41 to the current N0.60 per share price in recent times. Thus returning a gain of 46.8% for its holders.
Meyer Plc (MEYER)
MtD gains: 29.16%
The shares of the key player in the paint and decorative industry increased from N0.41 per share at the open of trade this month, to N0.53 per share as of the open of market this morning, to print a month to date gain of 29.16%.
The stock of the paint manufacturer is presently trading about 6% higher than its open price of N0.50 per share for the month of April.
University Press Plc (UPL)
MtD gains: 19.77%
The shares of one of Nigeria’s foremost publishers of educational and general reading materials, University Press Plc have increased from N1.07 per share at the close of trade on the 31st of March, to N1.28 per share at the open of trade on the Nigerian Stock Exchange today.
The recent surge in the shares of the company was triggered by buying interest on the floor of the exchange and this renewed interest in the shares of the publisher has seen its shares return an impressive 19.77% month to date gains to investors since the start of this month.
What you should know
- The Nigerian Stock Exchange All-share Index “NGX ASI” is on course to deliver its first weekly gains after weeks of consistent depreciation in the market index and capitalization.
- This decent performance can be linked to the renewed buying interest in the shares of some key companies with impressive fundamentals as Q1 2021 financial results start to trickle in.
Biden’s capital gains tax disturbs Wall street
The Dow Jones Industrial Average fell 321.41 points to 33,815.90, or 0.92%.
Following news that President Joe Biden is planning to propose far higher capital gains taxes for the wealthy, Wall Street sank sharply on Thursday. The Dow Jones Industrial Average fell 321.41 points to 33,815.90, or 0.92%. The blue-chip index fell 420 points at its lowest point for the day. The S&P 500 lost 0.94 percent of its earlier gains to close at 4,134.98, while the Nasdaq Composite fell 0.94 percent to 13,818.41.
Bloomberg News announced Thursday afternoon that Biden is considering raising the capital gains tax rate for rich Americans to as much as 43.4 percent. The measure would increase the capital gains tax threshold on people with $1 million or more to 39.6 percent, up from the existing rate of 20%.
- The Stoxx Europe 600 Index advanced 0.7% while the MSCI All-Country World Index declined 0.2%.
- Capital gains plan does not exempt crypto as Bitcoin fell for the sixth time in seven days, widening losses. If investors keep the cryptocurrency for longer than a year, they will be subject to capital gains tax.
- Growth stocks led the intraday downturn on Thursday, with shares of Tesla and Amazon sliding 3.3 percent and 1.6 percent, respectively, as a result of higher capital gains taxes. The iShares S&P 500 Growth ETF fell 1%, outperforming its value counterpart.
- Equifax up 15.06% to close at $221.64.
- Tractor Supply up 4.43% to close at $188.14.
- AT&T up 4.15% to close at $31.36
- Arconic up 3.67% to close at $27.43
- Danaher up 3.43% to close at $252.79
- Huntington Bancshares -6.71% to close at $14.46
- Dow down -6.01% to close at $60.92
- LyondellBasell Industries down -5.66% to close at $102.00
- Micron down -5.34% to close at $84.71.
- Nucor down -5.08.% to close at $76.11
- Long-term buyers will see a significant cost spike as a result of this tax increase. If investors believe the plan has a chance of becoming law next year, they may be expected to sell this year.
- Some analysts believe that it may be difficult to pass the bill into law in the senate.
Nairametrics advises cautious buying in this era of growing uncertainties.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- FCMB approves FY 2020 dividend pay-out of N2.97 billion to shareholders.
- Africa Prudential Plc posts profit after tax of N381.35 million in Q1 2021.
- Sovereign Trust Insurance Plc notifies stakeholders of 26th Annual General Meeting.
- Dangote Cement Plc to hold AGM on May 26th
- Linkage Assurance Plc proposes N500million as final dividend for 2020, and a bonus issue on its existing shares.