DELISTING: EXPERT CALLS FOR REVIEW OF LISTING, POST-LISTING REQUIREMENTS
BY MICHAEL EBOH & PROVIDENCE OBUH
An expert in the Nigerian financial market, Mr. Johnson Chukwu, has called on the regulatory authorities in the capital market to undertake a review of listing and post-listing requirements so to encourage companies to list and remain listed on the Nigerian Stock Exchange, NSE.
This is in response to agitations by market stakeholders over plans by a number of companies to delist from the NSE.
Speaking at a forum in Lagos, Chukwu, who is the Managing Director, Cowry Asset Management Limited, said that a review of the requirements will make it unattractive for companies to stay away from the secondary segment of market as they will be aware of the numerous benefits attached to being listed.
'There are complaints in some quarters over the decision by some companies to delist from the NSE.' he said, 'my response to that issue is that the authorities ensure a review of the listing and post listing requirements and law, making it very attractive for companies. If this is done, operators, shareholders and other stakeholders will not be bothered about compelling a company to remain listed.'
The review of the laws, according to him, is based on need to fully reform the market, through globalization, diversification and demutualization.
He expressed the urgent need for the authorities to encourage vibrant sectors of the economy, such as the telecommunication sector, the upstream oil and gas sector, companies in the power sector and foreign companies, to list their shares in the market, helping in no small measure in broadening the market.
'To make this possible,' he said, the current listing and post listing rules need to be reviewed and necessary incentives created to encourage listing of these companies, who have hitherto refused to be part of our capital market.'
He supported the planned demutualization exercise, adding that moving the ownership of the Exchange from a few owners to a diversified group of public shareholders via a capital market offering, would not only result in greater transparency and efficiency, but would equally generate improved returns for all stakeholders.
In support for diversification, he advocated a reform programme that will bring about a flourishing primary and secondary market for bonds, derivatives and securitization in Nigeria.
To ensure an effective globalization of the Nigerian market, he said, 'A critical success factor for any globalized capital market is the quality of its regulatory oversight and rules. Our quest to transform our markets to global standard must be backed by world class regulation and world class regulators.'
He also called on stakeholders to support plans to migrate to the International Financial Reporting Standards, IFRS, for Nigerian corporate sector from next year, as this will help remove the current bottleneck imposed by the discrepancies of our current financial reporting with global uniform standards.