Abbey Mortgage, BUA Foods, Champion Breweries, Notore, 15 others still locked with controlling investors
There are currently nineteen (19) companies listed on the Nigerian Exchange Limited (NGX) that still have majority of their shares locked-in by controlling-interest investors as against being in the hands of investing public, making the companies deficient in the free float of their shares.
Free float represents the portion of shares of a company that are in the hands of public investors as opposed to locked-in shares held by promoters, company officers or controlling-interest investors. It provides a more accurate reflection of what public investors consider the company to be worth. Stocks with smaller floats tend to be more volatile than those with larger floats.
Companies listed on NGX 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.
The free float requirement for companies listed on the Growth Board is a minimum of 10 percent of the issued and fully paid-up shares or the value of its free float is equal to or above N50 million, for entry segment. Also, for Growth Board, a minimum of 15percent of the issued and fully paid-up shares or the value of its free float is equal to or above N50 million, for standard segment.
For ASeM, NGX RegCo rule requires a minimum of 15percent of issued and fully paid-up shares or the value of its free float is equal to or above N50million. For Main Board, it is a minimum of 20percent of the issued and fully paid-up shares or the value of its free float is equal to or above N20 billion; while for Premium Board, it is a minimum of 20percent of issued and fully paid-up shares or the value of its free float is equal to or above N40 billion.
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According to the NGX Regulation Limited (NGX RegCo) X-Compliance report, the companies deficient in their free float are Abbey Mortgage Bank Plc which has only 7.20percent free float valued at N1.382billion; Aluminium Extrusion Industries Plc (16.27percent free float value at N257.639million); Austin Laz & Company Plc (19.36percent free float value at N424.363million); BUA Foods Plc (4.45percent free float valued at N48.832billion); and Capital Hotels Plc (3.18percent free float valued at N167.195million).
Other companies deficient in their free float are: Champion Breweries Plc (5.23percent free float valued at N1.428billion); CWG Plc (15.97percent free float valued at 419.284million); Ekocorp Plc (12.64 percent free float valued at N364.827million); Golden Guinea Breweries Plc (15.24 percent free float valued at N123.854million); and Infinity Trust Mortgage Bank Plc (0.94percent free float valued at N49.869million).
The X-Compliance Report is a transparency initiative of The NGX Regulation Limited (NGX RegCo) which is designed to maintain market integrity and protect investors by providing compliance-related information on all listed companies. The report shows companies that are still deficient in their free float. It also showed those that have applied for waivers from the Board of NGX RegCo, and have specifically provided compliance plans with tentative timelines to support their requests.
Also, International Breweries Plc has just 11.07 percent free float valued at N21.998billion; LivingTrust Mortgage Bank Plc has just 0.08 percent free float valued at N5.327million); Medview Airline Plc (14.16percent free float valued at N2.236billion); Notore Chemical Industries Plc (10.02percent free float valued at N10.091billion); Prestige Assurance Plc (15.46 percent free float valued at N819.661million); The Tourist Company of Nigeria Plc (1.75percen free float worth N111.359million); Transcorp Hotels Plc (5.47percent free float worth N2.599billion); Union Dicon Salt Plc (18percent free float is valued at N440.360million; and UPDC Plc (4.98 percent free float worth N952.839million).