Nigerian Stock Exchange to Expand Trade Limits in Bid to Encourage Market Making
The Nigerian Stock Exchange may alter regulations on trading limits as part of its plans to encourage market making.
The bourse is starting its market-making program, in which broker-dealer firms will enter bid and offer prices on specified stocks to improve liquidity, on Sept. 18. Stocks that have market makers assigned to them will have a price bandwidth movement of 10 percent, instead of the current 5 percent, Securities Africa Ltd. said in a note today.
“Brokers have been informed of the new limit which is intended to make market making function properly, as widening the price band will enable market makers to recoup investments in stocks, cover risk and remain in business,” David Adonri, chief executive officer of Lagos-based Lambeth Trust and Investment Co., said by phone Friday.