Experts Recommend 50% Free Float Rule for NGX Liquidity

Experts are advocating for a minimum free float requirement of 50% for companies listed on the Nigerian Exchange (NGX) to improve market liquidity and efficiency. Currently, the NGX mandates a minimum free float of 20% for companies, with market capitalization thresholds of N20 billion for the main board and N40 billion for the premium board.

Analysts Idika Aja and Muktar Moham suggest that increasing the number of trading hours could significantly enhance market depth and boost investor participation. Although the NGX plans to extend trading hours from 9:30 AM to 2:30 PM, starting April 27, 2026, analysts believe that structural issues, including the limited free float, will continue to constrain liquidity.

Aja also addressed concerns regarding the market's current valuation, arguing that the Nigerian stock market remains undervalued despite recent price increases, particularly in the oil and gas sector, which shows strong growth potential.