In the next couple of weeks, the Nigerian Stock Exchange (NSE) will be made to relax restrictions on intraday price swings on all stocks from 5 percent to 10 percent, BusinessDay has learnt.

Currently, only the price movement of Market Making stocks at the Nigerian bourse is allowed to go up to 10 percent each trading day, while other stocks outside the Market Making basket are trading at 5 percent band.

The recent pull-back in liquidity flow into the stock market caused a gradual erosion of the market year-to-date (ytd) growth at 18.18 percent.

Responding to questions during a press briefing in Lagos with board members of the Securities and Exchange Commission (SEC), Mounir H. Gwarzo, executive commissioner, operations of SEC said “In the next couple of weeks, all stocks trading band would be raised from 5 percent to 10 percent. It is not only the Market Making stocks that are going to be trading at 10 percent band.”

The apex market regulator has set  agenda for 2013 built around innovation, financial inclusion and effective results from recommendations from both institutional and retail investors, as they continue to see the capital market as a way of participating in the growing Nigerian economy.

In April last year, a $10 million deal with NASDAQ was signed by the Nigerian Stock Exchange to adopt its trading platform, making it easier for foreign and local investors to trade electronically.

This development comes on the heels of  SEC reaching the final stage on dematerialisation of shares. Dematerialisation (DEMAT) is the move away from physical certificates to electronic book keeping.

“The SEC has reached the final stage on dematerialisation. Any date we come out with would be the final. The only challenge we would have is the share certificates that are already in the market, but going forward, share certificates would be dematerialised,” Gwarzo added.

The effectiveness agenda of the Commission this year, is anchored on technology, as well as  more robust enforcement and disclosure regimes.

Arunma Oteh, director-general, Securities and Exchange Commission said SEC is building a foundation for investors to do transactions in the market in a very transparent manner. “Innovation will be on both supply and demand sides. On financial inclusion, our starting point is that we must develop vehicles that will enable Nigerians participate in the market. We are going to approach the Central Bank of Nigeria to allow Fund Managers to be agents, so that many Nigerians can be reached,” she said. 

Source:Businessday (By Iheanyi Nwachukwu)