The Securities & Exchange Commission (SEC) has confirmed its plan to discourage the de-listing of listed equities from the capital market. In a statement by by the SEC’s Acting Director General, Mary Uduk, Sec is committed to rather see an improved listing of multinationals companies in the nation’s capital market rather than the new trend of de-listing of same. According to her, the practice of de-listing by quoted companies sends a negative signal and remains a threat to market growth.
The commission have therefore disclosed that it had initiated moves to halt the development and encourage listings by more multinational companies in the country. In line with this, it has instructed the Capital Market Committee (CMC) to identify the real reasons for such development, adding that it would further meet with shareholders groups to determine same.
In our opinion, this is a right and timely moves as consistent voluntary de-listing of equities from the floor of the exchange is a dent to investors’ confidence. Although the exchange had been seen to have fully defend investor’s interest in its de-listing plans/approvals, we maintained that it should also observe discouraging factors scaring off listed companies. We are of the opinion that areas of major concentration should be creating a more relaxed system for listed equities. Strict care should be taken to ensure that companies cost of being listed on the floor of the exchange do not surpass their economic advantages.