The Nigerian Stock Exchange (NSE) at the weekend suspended the shares of four insurance companies for not submitting their 2017 audited accounts and statements.
This is contained in a notice to dealing members, listed the insurance companies as Veritas Kapital Assurance, African Alliance Insurance, Standard Alliance Insurance and STACO Insurance.
It said the suspension of trading in the shares of the affected companies took effect from July 5, and that the suspension would only be lifted upon the submission of the relevant accounts.
The notice further said the accounts must comply with all applicable rules of the exchange.
The exchange also noted that the trading in their stocks was based on speculation and was not good for the market.
Some shareholders who spoke to our correspondents noted that many listed insurance companies have poor corporate governance structures, noting that this poor management translates to late submission of accounts, non-payment of dividends mostly due to negative retained earnings.
The insurance stocks capitalisation on the NSE dropped N6billion within a month following the implementation of the new pricing methodology introduced by the exchange in January.
The NSE, on January 29, began the implementation of the one kobo rule from an initial floor of 50 kobo per share, meaning stocks can now trade at a minimum of one kobo per share.
The new pricing rule will see the prices of over one third of the quoted companies falling to as low as one kobo after the initial floor price of 50 kobo was removed.