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Financial experts are calling on the Nigerian Exchange Limited – NGX and market regulators to implement a significant structural shift by raising the minimum free float requirement for listed companies to 50%.

Currently, the NGX mandates a public shareholding of 20%—or specific market value thresholds reaching up to N40 billion for the Premium Board—but analysts argue these levels are insufficient to foster a truly deep and efficient market.

By increasing the volume of shares available to the general public, proponents believe the exchange can move beyond current constraints and significantly enhance market depth.

The recommendation surfaced during the latest Market Watch podcast, where analysts Idika Aja and Muktar Mohammed examined the limitations of recent regulatory updates. While the NGX is set to extend its trading hours from 9:00 a.m. to 4:00 p.m. starting April 27, 2026, Aja noted that simply aligning with global timing standards will not improve liquidity if there are not enough shares to trade. He emphasized that a 50% free float would be a more effective catalyst for investor participation than merely extending the trading window.

Addressing concerns regarding market stability, Muktar Mohammed dismissed fears that the Nigerian equities market has entered bubble territory. He maintained that the recent rally is rooted in improved corporate fundamentals and represents a necessary price correction after years of significant undervaluation.

According to Mohammed, the growth seen in the market is driven by genuine value rather than speculative excess, further justifying the need for structural reforms that allow more investors to tap into these performing assets.

Ultimately, while the shift to longer trading hours is a positive step toward global best practices, experts believe it is only a partial solution to the market’s liquidity challenges. The consensus remains that structural issues, specifically the limited availability of tradable shares, continue to stifle the exchange’s full potential.

Raising the free float requirement to 50% stands as a bold proposal to resolve these bottlenecks, ensuring that the Nigerian capital market can support higher volumes and offer a more robust environment for both local and international investors.