Delisting and Market Performance of Nigerian Stock Exchange: (1998 – 2018)

Abstract

This study evaluated the effect of delisting on the performance of the Nigerian Stock Exchange (NSE) by evaluating the effect of delisting on market capitalization; Stock Traded and All Share Index as market performance indices. Three research questions were raised and three hypotheses where formulated to guide the study. The study adopted a longitudinal research design using secondary data obtained through data capture sheet, extracted from the annual reports of the Nigerian Stock Exchange, for the period of 21years ranging from 1998-2018. The data collected were analyzed using simple linear regressions with SPSS 20 software. All hypotheses were tested at 5% level of significance. Results from the data analyzed revealed that there is significant effect of delisting on market capitalization and stock traded but there is no significant effect on all share indexes. Based on the findings of the study, the following recommendations are made: Listed firms should be supported and given certain financial waivers so as to encourage them to be effective in the market and this would remove the constraints to growth in the Nigerian capital market and especially the stock market; alternative substitute measures to delisting should be employed by the NSE to enforce compliance, example; imposition of fine etc.

Keywords: Delisting, market capitalization, stock traded, all-share index

DOI: 10.7176/JESD/10-6-04

Publication date:March 31^st 2019