Low Investors Interest Stagnates NGX ASeM Board
The Alternative Securities Market (ASeM) board of the Nigerian Exchange Limited (NGX) has been experiencing a prolonged period of stagnation due to a lack of investors’ interest. According to data from the NGX, the ASeM board’s index has remained unchanged at 658.99 basis points since July 19, 2023.
Companies listed on the ASeM index
Companies listed on the ASeM index include Capital Oil, with a market capitalization of N1.17 billion, Juli with N157.92 million, Rak Unity Petroleum Company with a market cap of N16.988 million, and Smurfit Products Nigeria with N9 million in market capitalization.
Capital Oil, for example, closed trading at N0.2 on Friday and has seen little to no activity in recent times. Its last financial results reported on the Nigerian Exchange Limited date back to September 30, 2018.
Juli Plc, a company involved in pharmaceutical retail, supermarket operations, and laboratory services, closed trading at N0.79 on Friday, a price it has maintained for the last seven trading sessions. The last time it saw any significant activity was on July 31, 2023, when 888 units of its shares were traded. Juli had filed its financial results up to the first half of 2023 with the NGX.
Smurfit also closed trading at N0.2 on Friday, with the same price at which 1,500 units of its shares were last traded on July 17. Rak Unity Petroleum Company plc’s shares closed at N0.3 per share on Friday.
Furthermore, NGX Regulation Limited, in its X-Compliance Report dated September 8, 2023, revealed that the process of closing down the ASeM Board is in progress.
Low investor’s interest rather than issues with the listed companies
Capital market operators have attributed this stagnation to poor investors’ interest rather than issues with the listed companies. They note that the companies on the ASeM board are smaller and less capitalized, making them less attractive to investors in the current market climate.
Tajudeen Olayinka, a stockbroker and the CEO of Wyoming Capital & Partners, stated that the lack of investor interest is the primary factor driving the moderation of the ASeM board. He emphasized that while these companies may not be highly liquid, it doesn’t necessarily imply that they have significant underlying issues. Many investors tend to avoid smaller, less liquid stocks, which impacts the trading activity on the ASeM board.
In summary
Low Investors Interest Stagnates NGX ASeM Board has experienced a prolonged period of inactivity due to a lack of investor interest, particularly in smaller and less liquid stocks. While the listed companies may not face significant challenges, they struggle to attract investors in the current market landscape.
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