STIMULATING THE NIGERIAN STOCK MARKET DEVELOPMENT THROUGH SHARE BUYBACK

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STIMULATING THE NIGERIAN STOCK MARKET DEVELOPMENT THROUGH SHARE BUYBACK.pdf (3.79 MB)

Date

2009-10-07

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Department of Banking and Finance, Nasarawa State University, Keffi.

Abstract

Share buybacks have become a common phenomenon in the financial markets worldwide. Since the legalization of the share buyback programme, no single company in Nigeria has expressed interest to repurchase its shares. This paper therefore examines the possible reasons(s) that may have hindered companies in Nigeria from undertaking the share buyback. The documentary research design and qualitative analysis were employed. The paper reveals that companies are discouraged from share buyback as a result of the stringent rules spelt out by the Securities and Exchange Commission (SEC), which in turn lead to high transaction costs for companies. For share buyback to be wholeheartedly embraced in Nigeria, there is the need to relax or even amend some of the unnecessarily stringent rules of the SEC such as the strict requirement for announcement and disclosure prior to and during a buyback program and even some provisions of the Companies and Allied Matters Act (CAMA) 1990 on share buyback like the approval of a buyback program by a special resolution at a general meeting of the company.

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Keywords

share buyback, Stock Market, Nigeria

Citation

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https://keffi.nsuk.edu.ng/handle/20.500.14448/863

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