Thursday, 03 December 2020

B Business

NIGERIAN STOCK EXCHANGE: 14 insurance companies, 5 others may face hostile take-overs

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A TOTAL of 19 quoted companies may now be under threat of hostile take-over in the Nigerian Stock Exchange, following the crashing of their stock prices below par value in the last two weeks.

 

The stocks were exposed to low valuation when NSE removed the decades-old par value price floor of 50 kobo below which stock prices could not go down.

prices of these companies began dropping below the 50 kobo with Consolidated Hallmark Insurance Plc leading the pack recording the lowest share price of 27 kobo in the market at close of trading last weekend.

According to capital market operators and shareholders, new par value rule policy that now allows quoted entities to trade to as low as one kobo, may eventually lead to forceful acquisition and change in management.

They called on companies that are threatened by the policy to retool their processes ad re-strategize to deliver optimal value to the stakeholders to avoid further erosion in their share prices.

 

 

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