NSE Clarifies Misconception on MTN Nigeria’s Free Float Valuation

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The Nigerian Stock Exchange (NSE), on the night of Monday, May 20, issued a statement clarifying misconceptions about a concession being given to MTN Nigeria on the minimum free float required for companies listed on the Exchange.

According to the statement, the rulebook of the Exchange, defines free float as the number of shares that an issuer has outstanding and available to be traded on The Exchange.

The free float as explained by the NSE includes all shares held by the investing public, and excludes shares held directly or indirectly by promoters, directors and their close relatives; strategic investors holding 5% and above of the issued share capital; or government.

Also Read: Why your Broker can’t get you MTN Shares now

MTN Nigeria which listed on the NSE’s premium board requires that a company have a minimum free float of 20% of its issued share capital or that the value of its free float is equal to or above N40 billion on the date The Exchange receives the issuer’s application to list.

The NSE however noted that MTN Nigeria met with the free float requirement of N40 billion.  “The free float of MTN at the time of listing was in excess of N90 billion.”

Highlighting it’s value for investors and market participants, the NSE called for a familiarisation of its rules, readily available on the website of The Exchange at www.nse.com.ng.

“Investor protection is very important to us at The Exchange and we have taken necessary steps to ensure that our market is fair and orderly,” the NSE’s statement partly read.

Continuing, it said “in 2016, we acquired NASDAQ’s SMARTS platform to proactively detect and deter manipulative tendencies, gather intelligence and execute risk-based supervision of flagged participants.”

The NSE noted that it had also implemented other initiatives aimed at providing investors with timely information on the compliance status of dealing members and issuers, such as BrokerTrax- a compliance report for dealing members and Compliance Status Indicator (CSI) codes (for issuers).

The NSE also mentioned the institutionalisation of its investor education program and the launch of its X-Academy in June 2017. This according to the Exchange is “because we have identified investor education as a veritable tool to galvanizing informed investments and necessary step towards protecting investors in our market.

Whilst we believe we have addressed the concerns raised, we will like to assure our stakeholders and the general public that The Exchange will continue to uphold global best practices in its business operations and will sustain engagement with its stakeholders to continually develop regulatory frameworks that ensure our market completely reflects our values of ambition, fairness and inclusion.”

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