Nigerian Stock Market to Lose N205 Billion as Five Major Companies Delist – The Nigerian Exchange Limited (NGX) is set to experience a significant decline in its equities capitalization, with an estimated N205.002 billion expected to be erased. This substantial decrease is attributed to the forthcoming delisting of five prominent companies: GlaxoSmithKline (GSK) Plc, PZ Cusson Plc, Oando Plc, Coronation Insurance Plc, and Capital Hotel Plc.
This development follows closely on the heels of Ardova Plc’s delisting in July 2023, which saw the removal of 1.31 billion shares and a market capitalization reduction of N21.49 billion.
GSK, a major player in the pharmaceutical sector, recently made headlines when it unveiled plans to halt its operations in Nigeria. The company’s decision, which remains shrouded in mystery, has been speculated by economic analysts to be closely tied to the challenges posed by the scarcity of foreign exchange and the subsequent devaluation of the Naira. This speculation was somewhat confirmed in GSK’s H1’23 report, where they mentioned the daunting business environment and its implications for their operations. The market stands to lose N15.49 billion from GSK’s delisting alone.
Another significant player, PZ Cusson, with a hefty market capitalization of N79.41 billion, aims to buy out minority shareholders. The company believes that this move, culminating in its delisting, will streamline and bolster its operations in Nigeria, fostering agility and innovation.
Oando Plc, with a market value of N87.02 billion, is also on the delisting path. Their decision comes after numerous legal disputes concerning ownership interests with some minority shareholders.
Coronation Insurance and Capital Hotel Plc, valued at N14.4 billion and N8.692 billion respectively, have also announced intentions to delist. Coronation Insurance’s decision came after a buyout offer from Coronation Capital (Mauritius), while Capital Hotel aims to seek strategic alliances and collaborations without the constraints of regulatory obligations.
These delistings, though individual in nature, together signal a challenging phase for the NGX and raise questions about the broader business environment in Nigeria.