Voluntary Delisting and Stock Market Performance In the Nigerian Firms: Management Perspective

Abstract

This paper investigates the effect of corporate voluntary delisting on the performance of the Nigerian Stock Exchange (NSE). Specifically, the study investigates the impact of voluntary and involuntary delisting on market capitalization and the quantity of stock traded from 1998 to 2019. Data for the study were gotten from the Central Bank of Nigeria (CBN) Statistics Bulletin 2019, and the Nigeria Stock Exchange Report, 2011-2019. The study patterned after the multivariate regression analysis through the aid of E-Views version 9.0. The study evidenced that firms’ voluntary delisting exerted a negative insignificant influence on both market capitalization and volume of stock traded. Meanwhile, firms’ involuntary delisting exerted a negative influence both market capitalization and volume of stock traded. However, it exerted high significant effect on market capitalization. Hence, the study concludes that corporate voluntary delisting on the overall has a negating effect on the performance of the NSE. The study therefore recommends that other than involuntarily delist firms, stock market regulators have to suggest for compliance, imposition of fines for minor offenses alongside revoke of licenses for at least six trading months for primary offenses committed.