‘How To Curb Delisting of Firms In Stock Market’

To reduce the persistent delisting of firms’ on the Nigerian Stock Exchange (NSE) to the barest minimum, investors have stressed the need for government to fast-track the acceleration of its industrialisation plan.
This will help to resuscitate the ailing manufacturing industries and other services sector.

Delisting is the process of removing a company from the official list of the stock market, either voluntarily or by compulsion.

The exchange, however, listed only five new companies- The Initiatives, in 2016 and Transcorp Hotels, Global Spectrum Energy Service, Jaiz Bank and Med-View Airline in 2017.

The investors, who spoke in an interview with The Guardian, argued that for Nigeria to become a strategic economic frontier in Sub-Saharan Africa and across the globe, it must have vibrant manufacturing sector that would help spur activities in the stock market.

According to them, if the manufacturing sector of any economy were not recording a significant improvement, the companies operating in the environment would find it difficult to grow and make profit.

This, according to him would continue to reflect on the company’s financials and share prices in the stock market.

Specifically, an independent investor, Tony Ibeh, said: “If the manufacturing sector of any economy were not recording a significant improvement, the share price will drop in the stock market and nobody would come to such market to raise capital because the market cannot support it.

“Regulators must seek to provoke more domestic demand in the economy so that the demand can drive supply for consumer companies to make profit and make it cheap for people to borrow and companies can employ more people, hire and train more workforces.” He added.

The former Secretary General of the Independence Shareholders Association, Adebayo Adeleke explained that one of the two biggest socio-economic challenges facing the nation is the issue of job creation.

He argued that Nigeria cannot create jobs without having a strong manufacturing base and industrialised economy.

He wondered why government would subsidize dollar for pilgrimage, while manufacturing sector that creates job and stimulate economic growth is neglected.

He added that if the processes and procedures involved in the implementation of the industrialisation plan is strengthened, it would spur economic growth, facilitate job creation and repositioning Nigeria at a competitive level in international trade.

Furthermore, Adeleke pointed out that manufactures are facing untold hardship due to harsh operating environment, noting that if government fails to revive the sector, more firms’ would be delisted from exchange .

“We need to get our priorities right in this country, it is true that we are highly religious, a situation where government is subsidizing the rate if dollar for people who wants to go on pilgrimage selling dollar to them at N197 per dollar and then giving about N316-N320 rate to manufacturers.

“These are people that who keep the engine of business running, employ other people and make them productive, get more products in to the system, make life more affordable for every body. Don’t you think we are getting things essentially wrong?

“Some of these companies cannot just cope, probably the volume of business they are doing is not that large and that is why some of them are delisting, even though some are voluntary, they are facing difficulties and challenges.”

By Helen Oji

The Guardian Newspaper June 27th, 2018

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