Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Business News

What the NSE’s amended pricing methodology is expected to accomplish  

Emmanuel Abara Benson by Emmanuel Abara Benson
October 15, 2019
in Business News, Stock Market
Sulaimon Adedokun resumes as TRANEX Board Chairman  Dangote Cement, Zenith Bank, shares, stocks, ARM's Shares of fortune, Understanding securities lending, nigerian stock exchange, coronavirus, NSE, Bears return ASI down 0.13% as trading volumes plunge, What’s going to happen to Nigeria’s stock market in May?, What’s going to happen to Nigeria’s stock market in May?, Nigerian bourse gains N37. 26 billion, triggered by BUACEMENT, ZENITH
Share on FacebookShare on TwitterShare on Linkedin

The Nigerian Stock Exchange (NSE) recently announced an amendment to its pricing methodology, whereby the price movement of the securities traded on the bourse will, henceforth, be guided by certain rules. In specific terms, the NSE said the new minimum number of equities that must be traded between two parties before prices can change is 100,000. This applies to all the securities listed on the bourse.

The development is expected to encourage stability, efficiency, and fairness in the pricing of securities, according to Muktar Mohammed, an Analyst at Assar Investments. Mohammed joined CNBC Africa’s Market Watch host, Esther Awoniyi, to discuss the development.

[READ MORE: DMO Lists Series II FGN ₦15bn 7-Year Green Bond on NSE]

RelatedPosts

Sell-offs from MTN causes market to dip by N125 billion

MTN share price hits 52-week high as the market value reaches N5.50 trillion

CCNN/ Kalambaina Cement merger - Nigeria stock excahnge

Good for market liquidity: According to Mohammed, the new rule will now make sure that price movements in the Nigerian capital market are solely influenced by the forces of demand and supply. He further explained that the advantage of this is that it would encourage liquidity because companies would now be forced to either issue bonuses or offer fresh shares.

News continues after this ad


“What we are going to see now is that markets will be moved based on demand and supply in both ways. So, this method is not just that maybe the units of Nestle will have to move by 100,000 units; no. It has to move by one single individual, one single trade of 100,000 units. 

“In the long run, what this will do is that some of these equities (Nestle, Dangote, and others) will need to either add up by giving bonuses to their shareholders, or come to the market and have people still buy into the market so that they can be very liquid because the challenge about it is that some stocks are actually not liquid. So, this also will help in terms of market liquidity.” 

In the meantime, he reacted to the concerns that have been raised by some people who feel that the new pricing methodology may not be fair enough on big stocks such as Nestle, Seplat, and the likes. According to him, such concerns are groundless and “illegitimate” because the big stocks have to boost their liquidity anyway. He also pointed out that some of these companies’ share outstanding is quite small and held by very few individuals.

News continues after this ad


[READ ALSO: NSE’s only listed mining firm to put $100 million to work]

The development will also favour low-cap stocks which have been suffering under the dominance of the big ones, Mohammed noted.

“That too could be fair on the low cap stocks who have been suffering from not being treated fairly because then with about 50, 000 units (some of them 10, 000 units) their prices came crashing down. Now, it will take a 100, 000 units to bring down their prices or even raise up their price. So, it depends on which space of the pendulum you are… But I think in the long run, it’s a good thing that the Exchange is doing what they are doing.” 

Related

Tags: Muktar MohammedNigerian Stock Exchange

Comments 1

  1. Godfrey Okwuonu says:
    October 17, 2019 at 10:29 am

    This is actually a good development in the Nigeria stock market.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

inq
avatrade
Stanbic bank
Mega Millions
UBN
Hot forex
Access Bank
Bankers Committee
First bank






    Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

    Recent News

    • SERAP threatens to sue INEC if 7 million Nigerians are not allowed to complete voters’ registration
    • Bitcoin on 5th day winning streak, hits highest level since June 13
    • Nigeria’s central bank, Africa Fintech Foundry to support 10 startups to boost eNaira adoption

    Follow us on social media:

    Recent News

    INEC plans e-transmission of results in Anambra poll, massive voter turnout in central zone

    SERAP threatens to sue INEC if 7 million Nigerians are not allowed to complete voters’ registration

    August 14, 2022
    Depegging sees Bitcoin hit $138,000 per token in UST

    Bitcoin on 5th day winning streak, hits highest level since June 13

    August 14, 2022
    • ABOUT US
    • CONTACT US
    • PRODUCTS
    • ANDROID APP
    • iOS APP
    • DISCLAIMER
    • CAREERS
    • PRIVACY POLICY

    © 2022 Nairametrics

    No Result
    View All Result
    • Home
    • Exclusives
      • Financial Analysis
      • Corporate Stories
      • Interviews
      • Investigations
      • Metrics
    • Markets
      • Cryptos
      • Commodities
      • Equities
        • Dividends
        • Stock Market
      • Fixed Income
      • Market Views
      • Securities
    • Industries
      • Company News
      • Consumer Goods
      • Content Partners
      • Corporate deals
      • Corporate Press Releases
      • Energy
      • Entertainment
      • Financial Services
      • Hospitality & Travel
      • Manufacturing
      • Real Estate and Construction
      • Tech News
    • Economy
      • Get Data
      • Macro-Economic News
      • Research Analysis
    • Business News
    • Financial Literacy
      • Career tips
      • Personal Finance
    • Lifestyle
      • Billionaire Watch
      • Profiles
    • Opinions
      • Blurb
      • Op-Eds

    © 2022 Nairametrics

    Social Media Auto Publish Powered By : XYZScripts.com