Shareholders operating on the Nigerian Stock Exchange (NSE) have been urged to be more proactive in monitoring their investment, to avoid losing out through delistment.
Mr Sola Oni, a chartered stockbroker and Chief Executive Officer, Sofunix Investment and Communications, stated this in an interview with newsmen on Tuesday in Lagos.
Oni spoke to newsmen while reacting to a proposed plan by Dangote Flour to delist from the exchange at the completion of its acquisition by Olam International Ltd.
He said that shareholders should monitor the performance of companies where they have stakes or do so through their stockbrokers.
“There is a need for shareholders to be more active in monitoring their investment. This is why Investment Policy Statements are a must for all investors.
“There is no market where companies do not delist. Shareholders should monitor the performance of companies where they have stakes or do this through their stockbrokers.
“They are supposed to attend Annual General Meetings (AGM) to exercise their power to ask questions on how the company is performing, as required by corporate governance principles,’’ Oni said.
He explained that there were usually warning signals before delistment becomes the last option, noting that smart shareholders would have exited ahead of such decisions.
Oni said that “funny enough some shareholders don’t even know when the companies where they own shares delist, as they care less about the companies.
“Annual Reports contain a lot of information on a company’s performance. Quarterly reports, as required by regulatory bodies, are available.
“A company that fails to present these results is a suspect and shareholders are obliged to ask questions so that they can decide early enough whether to exit or stay. They need not wait till the announcement of delistment.
“There are lots of early warning signals to know whether a company is up and running or is gradually losing the status of a going concern.
“We should not also forget that delistment may be the best option for a company to survive.
“Interestingly, we now have Over-the-Counter (OTC) markets such as the NASD and the FMDQ OTC Securities Exchange where such a company can take advantage of less stringent listing requirements to remain in business,’’ Oni said