The Nigerian Stock Exchange (NSE) has addressed claims of manipulation in the stock market which was stated to have happened last year, between January and February 2018.
The stock exchange reportedly experienced a surge in market activities in the secondary market, prompting claims of manipulation in the stock market. But the Chief Executive Officer of the NSE, Oscar Onyema debunked the allegation.
While reacting to the manipulation claim which was brought to his attention by a stockbroker, Onyema stated because there’s a record of significant buying and selling market activities doesn’t translate into manipulation of the system, adding that there are systems that survey market activities and prevent exceptions.
Recall that in December 2018, NSE and Nasdaq extended their agreement which will see the NSE continue to use Nasdaq’s SMARTS Market Surveillance technology to monitor its market for manipulation, spoofing and layering.
“Let me remind stockbrokers that if you see something you or discover abnormal movement, you say it immediately and we will follow up and investigate. We have system for surveying the market and it is arguable the best system for surveying the market in the world.
“This system looks at market activities on a continuous basis and throws out exceptions. And when we see exceptions, we investigate those exceptions. Just because of significant buying and selling market activities does not on itself create market manipulation.
“So, it is important for us to know that if you actually see something, you should let us know and come to talk to us and we will look at it very closely. But if our own model and system are not throwing up any exception, you will agree with me that it will be inefficient for us to take action just because there is market activity.”
Need for more foreign investors
Meanwhile, Onyema has stressed the need for more participation of foreign investors in the market activities. The bourse CEO said while it’s important to deepen the participation of retail domestic investors, foreign investors are also significantly important as well.
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Adhering to listing requirements
There have been worries about listing requirements in the Nigerian Stock Exchange, with some companies delisting from NSE, but to douse the fear, Onyema said in as much as NSE will ensure firms stick to the listing requirements for shareholders’ benefit, the exchange will also assist the companies in complying with the listing regulations.