Investors Sound Alarm as More Companies Exit NGX Amid Economic Challenges
The persistent structural challenges in Nigeria’s business environment have triggered fresh concerns among shareholders, who warn that without urgent reforms, more companies may opt for voluntary delisting from the Nigerian Exchange Limited (NGX).
The latest company to make this move is MRS Oil Plc, which recently secured shareholder approval to transition its shares to the NASD OTC Securities Exchange. The oil firm, valued at ₦60 billion, has seen its stock price plummet by 19.7% in 2025, ranking it among the worst performers on the exchange this year.
This growing trend has alarmed investors and market stakeholders, as MRS Oil joins a list of companies exiting the NGX, following CAP Plc and UACN, both of which had also signaled plans to delist. In the past decade, over 20 companies have left the NGX, with several more announcing their exit plans in 2024 alone.
Why Are Companies Leaving the NGX?
1. Economic Instability:
Many firms cite fluctuating foreign exchange rates, rising inflation, and operational costs as key reasons for their exit. The depreciation of the naira has significantly impacted businesses with foreign obligations, making it difficult for them to remain publicly traded.
2. High Compliance Costs:
The regulatory burden on listed companies—including financial reporting, corporate governance, and disclosure requirements—is becoming increasingly difficult to sustain. For many businesses, the cost of compliance outweighs the benefits of being listed.
3. Market Liquidity Challenges:
Companies transitioning to over-the-counter (OTC) markets, such as NASD, often face lower trading volumes, making it harder for shareholders to buy or sell shares at favorable prices. Many investors fear that delisting limits investment opportunities and weakens the stock market’s role in capital formation.
Investors Demand Urgent Action
President of the Independent Shareholders Association of Nigeria (ISAN), Moses Igbrude, has called for immediate intervention from the Federal Government, the Securities and Exchange Commission (SEC), and the NGX to reverse the delisting trend. He advocates for:
• Tax incentives and financial benefits to encourage companies to remain listed.
• Policy reforms to ease regulatory burdens and attract more businesses to the capital market.
• Stronger investor protection measures to restore confidence in the NGX.
Similarly, independent investor Amaechi Egbo stressed the need for reduced compliance costs, improved market liquidity, and stabilized foreign exchange policies to keep companies from exiting the stock market.
What’s Next for the Nigerian Stock Market?
The continued exit of companies raises serious concerns about the long-term stability of Nigeria’s financial sector. While delisting may offer short-term relief for companies facing economic pressures, the trend threatens to reduce investment opportunities for both local and foreign investors.
For Nigeria to maintain a vibrant capital market, experts agree that urgent structural reforms are needed to make the NGX more attractive for businesses while ensuring that investors are protected from the negative impact of voluntary delistings.
The persistent structural challenges in Nigeria’s business environment have triggered fresh concerns among shareholders, who warn that without urgent reforms, more companies may opt for voluntary delisting from the Nigerian Exchange Limited (NGX).
The latest company to make this move is MRS Oil Plc, which recently secured shareholder approval to transition its shares to the NASD OTC Securities Exchange. The oil firm, valued at ₦60 billion, has seen its stock price plummet by 19.7% in 2025, ranking it among the worst performers on the exchange this year.
This growing trend has alarmed investors and market stakeholders, as MRS Oil joins a list of companies exiting the NGX, following CAP Plc and UACN, both of which had also signaled plans to delist. In the past decade, over 20 companies have left the NGX, with several more announcing their exit plans in 2024 alone.
Why Are Companies Leaving the NGX?
1. Economic Instability:
Many firms cite fluctuating foreign exchange rates, rising inflation, and operational costs as key reasons for their exit. The depreciation of the naira has significantly impacted businesses with foreign obligations, making it difficult for them to remain publicly traded.
2. High Compliance Costs:
The regulatory burden on listed companies—including financial reporting, corporate governance, and disclosure requirements—is becoming increasingly difficult to sustain. For many businesses, the cost of compliance outweighs the benefits of being listed.
3. Market Liquidity Challenges:
Companies transitioning to over-the-counter (OTC) markets, such as NASD, often face lower trading volumes, making it harder for shareholders to buy or sell shares at favorable prices. Many investors fear that delisting limits investment opportunities and weakens the stock market’s role in capital formation.
Investors Demand Urgent Action
President of the Independent Shareholders Association of Nigeria (ISAN), Moses Igbrude, has called for immediate intervention from the Federal Government, the Securities and Exchange Commission (SEC), and the NGX to reverse the delisting trend. He advocates for:
• Tax incentives and financial benefits to encourage companies to remain listed.
• Policy reforms to ease regulatory burdens and attract more businesses to the capital market.
• Stronger investor protection measures to restore confidence in the NGX.
Similarly, independent investor Amaechi Egbo stressed the need for reduced compliance costs, improved market liquidity, and stabilized foreign exchange policies to keep companies from exiting the stock market.
What’s Next for the Nigerian Stock Market?
The continued exit of companies raises serious concerns about the long-term stability of Nigeria’s financial sector. While delisting may offer short-term relief for companies facing economic pressures, the trend threatens to reduce investment opportunities for both local and foreign investors.
For Nigeria to maintain a vibrant capital market, experts agree that urgent structural reforms are needed to make the NGX more attractive for businesses while ensuring that investors are protected from the negative impact of voluntary delistings.