The Nigerian Stock Exchange (NSE) on Thursday announced plans to shore up the maximum daily regulation to 10 per cent.
The News Agency of Nigeria (NAN) reports that the plan is part of the management’s effort to increase market liquidity and depth.
NSE daily regulation refers to the maximum limit allowed brokers to raise or lower share prices daily at the Exchange.
The Exchange, since inception about 48 years ago, had operated the maximum limit of 5 per cent.
Mr Ade Bajomo, Executive Director, Market Operations & Technology of the Exchange told the News Agency of Nigeria (NAN) in Lagos that new pricing regulation referred to as “equities circuit breaker”, would begin in May.
He said that the circuit breaker regime would come in place when the Exchange starts market making.
``We will actually kick it off when the market making starts at the Exchange and it will be in the next three weeks time,’’ Bajomo said.
He said that the circuit breaker, at the initial kick off date, would be extended to only stocks, which market markers were working on.
He also said that the upward review was due to volatility of market making business and the need to enhance liquidity.
Bajomo, who earlier unveiled the 2012 Annual Capital Market Conference, organised by the BusinessDay, said that the Exchange would also introduce a minimum acceptable technology standard for market operators.
He advised market operators to ensure regular upgrading of their technology.
According to him, the Exchange would ensure strict compliance to rules and regulations by all stakeholders through surveillance.
Mr LucaDel Conte, former Executive Director, Treasury & Capital Markets Medi Capital Bank Plc, London, remarked that domestic capital was paramount for the growth of any emerging market.
He pointed out that local investors should be encouraged to invest in the market with less emphasis on foreign investors.
He also said that investment banks, operating in the country, would be the major instrument for the success of market making introduced by the Exchange, as it involves a lot funds. (NAN)