By Udeme Ekwere

The Nigerian Stock Exchange has said that it will increase trading activities by another two hours within the next two months. The move will take trading hours to seven.

The Interim Administrator of the NSE, Mr. Emmanuel Ikazoboh, who disclosed this to Reuters on Thursday, said that the move had become necessary in NSE’s attempt to attract more foreign participation in its activities.

Currently, foreign investors account for over 68 per cent of activities on the Exchange.

He added that the increase in trading hours would be targeted specifically at attracting more United States Investors.

“Within the next one month or two, I am going to increase the trading hours from 9:30 am to 4:30pm (0830-1530 GMT). This is to increase volumes and allow American investors to trade in our market,” Ikazoboh said.

He said the Exchange’s trading volume rose by a quarter and the value of deals rose by 15 per cent in the first two months, after trading was widened by two hours to (9.30am to 2.30pm) in December.

Ikazoboh said the NSE was also looking at removing the five per cent cap on individual daily share price movements, which he said was keeping a lid on volumes.

He said the Exchange had done various studies to determine the effect on the market.

The NSE interim administrator had earlier, harped on the need for more local participation in the capital market.

According to him, there is the need for more Nigerians to be interested in the market, as 68 per cent of shares in the market are held by foreign investors.

“The reason is that confidence has not grown for our people to start buying as much as foreign investors. It is an issue we need to address,” he noted.

Ikazoboh said that the Exchange was looking at establishing an alternative market for small and medium enterprises and for private placements within three months.

He added that it was also monitoring the performance of stock prices to decide whether to alter the current cap of five per cent on changes permissible on share prices.

He said in order to further deepen the market and make it more attractive to foreign investors; the NSE would introduce more tradable instruments into the capital market.

According to him, the bulk of transactions in the market last year was from the equities segment, which means that the Exchange is dealing mainly on equities. This, he said, did not augur well for growth in the market.

He said, “The equity market accounted for 99.9 per cent of total value, and this is not too good for the market. And in line with this, the Exchange is committed to introducing new tradable instruments as the market develops.

“During the year, the Securities and Exchange Commission released the proposed draft rules on Exchange Traded Funds while the Exchange is working on designing the listing requirements for the instruments. We expect the ETF trading to make a debut in our market in 2011, while the SEC and NSE are involved in capacity building preparatory to its take-off.”

 

(Source: Punch)