April 21, (THEWILL) — Financial market experts are advocating a significant increase in the free float requirement for companies listed on the Nigerian Exchange Limited (NGX), proposing a 50 percent threshold to improve liquidity, deepen market activity, and enhance efficiency.
The recommendation featured prominently on the Market Watch podcast hosted by Frank Fagbo and Oge Obierika, where analysts reviewed recent trends shaping the equities market.
Currently, NGX mandates a minimum free float of 20 percent for Main Board listings or a market value benchmark, while Growth Board requirements range between 10 percent and 15 percent.
However, analysts Idika Aja and Muktar Mohammed argued that increasing the proportion of shares available to the public would have a more meaningful impact on trading activity than extending market hours.
Aja noted that while the planned extension of trading hours—from 9:30 a.m.–2:30 p.m. to 9:00 a.m.–4:00 p.m. aligns with global practices, it may not significantly boost liquidity without structural reforms.
“If free float rises to 50 percent, more shares will be available for trading,” he said.
Mohammed dismissed concerns that the current market rally reflects a bubble, attributing price gains to improved corporate fundamentals and a correction from years of undervaluation.
The NGX is set to implement longer trading hours from April 27, 2026, a move expected to enhance participation. Still, analysts maintain that limited free float remains a key constraint.
They also noted that while a near-term correction is possible as investors rebalance portfolios, many Nigerian stocks particularly in the oil and gas sector continue to show strong growth potential and remain attractively valued.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
