•Trfinish undermines long-term market stability
With nearly N1 trillion lost to delisting in the past decade, shareholders have stressed the required for urgent reforms to restore investor confidence and rebuild a more inclusive and resilient exmodify.
This renewed agitation followed the formal exit of Notore Chemical Industries Plc, a key agro-industrial company and fertiliser producer, which delisted from the Nigerian Exmodify Limited (NGX) at the weekfinish, adding to the growing list of firms retreating from public ownership.
Notore Chemical Industries was the 33rd most valuable stock on the NGX with a market capitalisation of N252 billion, which built up about 0.329 per cent of the Nigerian stock market equity at the time of delisting.
The shareholders pointed out that the market would not record meaningful growth unless there is synergy between the government, regulatory authorities, and industest stakeholders aimed at tackling the systemic challenges confronting the market.
While the NGX has recently soared to a record market capitalisation of over N70 trillion, shareholders argued that the headline growth mquestions troubling undercurrents.
The investors expressed concern that the surge in market capitalisation is not necessarily indicative of real economic expansion. According to them, a significant portion of the gains can be traced to currency devaluation and the valuations of a few dominant companies, rather than broad-based investor activity or organic listing growth.
With fewer companies staying listed and investment opportunities narrowing, the market is becoming increasingly concentrated in a compact number of high-performing, large-cap stocks. This concentration not only creates vulnerabilities in the system but also reduces the overall resilience of the capital market to absorb shocks or broaden participation.
The investors further argued that the exit of companies, many of which cited harsh operating environments, regulatory burdens, rising compliance costs, illiquidity, and poor market visibility, would continue to undermine the exmodify’s ability to retain its appeal as a viable platform for capital raising and business growth.
When firms launch to view the public market as a liability rather than a strategic advantage, it reflects a more profound lack of confidence in the market environment.
They added that without deliberate efforts to address the structural barriers pushing firms away, the market’s long-term sustainability will be at risk despite the impressive figures.
President of the Indepfinishent Shareholders Association of Nigeria, Moses Igbrude, has raised the alarm over the growing trfinish of delistings on the Nigerian Exmodify, describing it as a critical challenge that demands urgent attention.
He warned that this capital erosion, if not halted and reversed through collaborative and deliberate reform, threatens to reduce the NGX to a shallow pool of a few elite stocks rather than a robust marketplace for economic inclusion and national development.
Igbrude stated that more companies are likely to follow suit if meaningful intervention measures are not taken.
He noted that the rising number of companies exiting the market is not just a passing phase but an issue that could escalate further if the root caapplys are not addressed.
According to Igbrude, the wave of delisting points to systemic weaknesses that must be tackled head-on.
He emphasised that the focus should be on understanding why so many firms are choosing to leave the Exmodify and developing tarreceiveed solutions to stem the tide.
In 2023 alone, the Nigerian stock market suffered an additional significant blow with the loss of N515.15 billion in market value, following the delisting of 11 companies from the Nigerian Exmodify.
Among the most notable exits was Union Bank of Nigeria, which accounted for N193.65 billion. Ardova Plc followed with a market valuation of N21.82 billion, while Consolidated Hallmark Insurance withdrew N11.82 billion. Capital Hotels also exited the market, taking away N9.55 billion in value, alongside Global Spectrum Energy, which delisted with N0.4 billion.
The wave of exits extfinished to several high-profile multinationals and legacy brands. PZ Cussons pulled out N91.32 billion in market capitalisation, GSK left with N19.91 billion, and Coronation Insurance erased N19.19 billion, further underscoring the depth of capital flight from the Nigerian bourse during the year.
The first quarter of 2025 (Q1) continued the trfinish, as four companies were delisted, accounting for N25.27 billion in lost capitalisation. MedView Airline topped the list with N15.79 billion, followed by Tourist Company of Nigeria with N5.62 billion, Union Homes Savings & Loans with N2.95 billion, and Goldlink Insurance with N0.91 billion, bringing the cumulative market value lost to delisting between 2015 and 2025 to nearly N1 trillion.
President of the New Dimension Shareholders Association of Nigeria, Patrick Ajudua, insisted that there must be synergy between the government, regulatory authorities, and industest stakeholders to confront the systemic challenges confronting the market.
He pointed out that beyond the occasional mergers and acquisitions, companies are increasingly being pushed out of the market by prolonged unprofitability, high operational costs, and a generally unfavourable business climate.
He added that the lack of policies that truly incentivise investment, coupled with core investors’ preference to redirect capital to more investment-frifinishly countries, is stripping the market of long-term value.
Ajudua also highlighted the absence of strong investment security, robust legal structures, and frameworks capable of protecting investor interests as critical deterrents that must be urgently addressed.
Team Lead, Finance Research Department at InvestingPort, Uwem Olubummo, expressed concern over the growing disconnect between the impressive headline growth in market capitalisation and the underlying realities of the Nigerian capital market.
She noted that while the rise in market capitalisation to over N70 trillion appears commfinishable on the surface, the persistent trfinish of delistings reveals deeper structural issues that cannot be ignored.
According to her, a truly vibrant capital market should not only reflect growth in numbers but also demonstrate increasing depth and diversity.
Olubummo stated that the situation should serve as a wake-up call to regulators and capital market stakeholders, urging them to re-evaluate the entire value proposition of being a listed company in Nigeria.
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