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Tag: NSE

  • Stock Exchange extends deadline for Dangote Cement’s capital restructuring

    Stock Exchange extends deadline for Dangote Cement’s capital restructuring

    The Nigerian Stock Exchange (NSE) has granted Alhaji Aliko Dangote, the core investor in Dangote Cement (Dancem) Plc, a two-year extended timeline to reduce his majority shareholding in Dancem in order to deepen public participation in the shares of the cement company.

    The NSE had earlier given Dancem October 2014 to comply with listing regulations that require all quoted companies to have minimum free float of 20 per cent. The management of Dancem had applied and presented compliance plan based on which the NSE approved compliance deadline of October 2014 for the company.

    The Nation’s check indicated that NSE has extended the deadline for Dancem to October 2016, following the failure of Dancem to meet the October 2014 deadline.

    Dancem’s free float, according to NSE official document, remains below free float benchmark at 9.07 per cent, implying that Aliko Dangote’s Dangote Industries Limited (DIL) may have to sell some 10.93 per cent equity stake to the general investing public.

    DIL had earlier sold some equity stake to improve Dancem’s free float from a low of 4.93 per cent to the current position of 9.07 per cent. The South Africa’s government, through its wholly owned investment company, Public Investment Corporation of South Africa (PIC), had acquired 255.61 million ordinary shares of 50 kobo each of Dancem.

    By the expiration of the October 2016 deadline, Dancem is mandatorily required to have completed partial divestments or dilution of the core investor’s shareholdings to free 20 per cent equity stake for public holding, unless the management of the NSE grants fresh waivers and extensions for the companies. In the extreme instance, a company with deficient public float may opt to delist its shares.

    The reduction in shareholding is to enable Dancem to comply with the free float rule at the NSE. Companies listed on the NSE are required to maintain a minimum free float of 20 per cent and 15 per cent for companies on the main board and second tier board respectively. Dancem is quoted on the main board. It is NSE’s most capitalized stock.

    Free float, otherwise known as public float, refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is 5.0 per cent and above in Nigeria.

    Thus, free float’s shares do not include shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

    Stock markets maintain minimum public float to prevent undue concentration of securities in the hands of the core investors and related interests, a situation that can make the stock to be susceptible to price manipulation. Besides, it provides the general investing public with opportunity to reasonably partake in the wealth creation by private enterprises.

    Six other companies are also expected to comply with their scheduled deadlines for improvement of their free floats to 20 per cent. These included Nigerian Insurance (GNI) Plc, Chellarams Plc, Nigerian Ropes Plc, Union Bank of Nigeria (UBN), Capital Hotel Plc and Aluminium Extrusion Industries Plc.

    NSE’s report indicated that GNI currently has 16 per cent of its issued shares in the hands of the general investing public while Chellarams and Nigerian Ropes has 5.20 per cent and 13.96 per cent respectively. Capital Hotel currently has 2.23 per cent of its issued shares in the hands of the general investing public, implying that the core investors will need to sell down about 17.77 per cent to the general investing public or undertake a dilution through new capital issue.  Union Bank has a free float of 13.98 per cent while Aluminium Extrusion Industries has 17.55 per cent.

     

     

    According to the report, the management of the NSE has given GNI a deadline of July 8, 2016 while Aluminium Extrusion Industries and Nigerian Ropes will have to complete their share restructurings by March 2015 and January 7, 2015 respectively. Also, Capital Hotel has a deadline of April 20, 2016 to complete the share restructuring. Union Bank of Nigeria has up till June 2017 to improve its free float.

     

  • NSE to remove low-level stockbrokers

    NSE to remove low-level stockbrokers

    • Sticks to December 31 deadline for new standards

    Stockbrokers and dealers at the Nigerian stock market will face a litmus test of minimum operating capacity in the New Year as the Nigerian Stock Exchange (NSE) begins implementation of its minimum operating standard (MOS) requirements.

    A circular dispatched to stockbroking firms on the eve of the Yuletide holidays, a copy of which was obtained by The Nation, indicated that stockbrokers will be reclassified under four categories according to operating capacity in 2015 while other stockbroking firms that fail to meet requirements for any of the four categories will be exited from the market.

    Also, existing stockbrokers that fail to meet the first three levels of operating standards will be reclassified as sub-brokers, partially recognised operators, and they will lose their membership of the Exchange.

    Contrary to expectations that the Exchange may delayed the implementation, the circular, authorised by the broker-dealer regulation department of the Exchange and titled “Implementation of the NSE’s Minimum Operating Standard Requirements (MOS)” stated that the “deadline for compliance with the MOS remains December 31, 2014”.

    The implementation of the MOS deadline placed stockbrokers, which also face similar recapitalisation deadline from the Securities and Exchange Commission (SEC), in a tight position. There is ongoing strong lobby for extension of the deadline by SEC, which has not issued any statement on the extension as at press time.

    The new standards relate to all the three classes of dealing members including broker-dealers, brokers and dealers and address the five broad areas of manpower and equipment; organizational structure and governance; effective processes; global competitiveness; and technology.

    According to the circular, dealing members shall cease to submit monthly MOS compliance level reports to the Exchange and instead, no later than March 31, 2015, each Dealing Member is required to submit one final MOS compliance level report in the prescribed templates previously provided by the Exchange. Dealing members that do not comply by March 31, 2015 will immediately be suspended from trading until they comply.

    Also, commencing in April 2015 and until the beginning of the fourth quarter of 2015, the Exchange will conduct thematic reviews and examinations to evaluate each dealing member’s level of compliance with the MOS.

    Dealing members that have partially complied by the fourth quarter of 2015 may be provided additional timelines to comply as appropriate.  However, the accommodation of additional timelines may be accompanied by penalties as appropriate.

    According to NSE, following the thematic reviews and examinations, stockbrokers that are not in compliance with the MOS by the fourth quarter of 2015 will be advised to reclassify from broker-dealer status to a classification with lower MOS requirements. These include splitting the functions and becoming either a broker or dealer or becoming a sub-broker, a quasi operator with no membership of the NSE.

    Other stockbroking firms that fail to meet any of the four categories will be directed to “exit the market in an orderly manner”.

  • NSE woos small, medium companies with affordable listing

    The Nigerian Stock Exchange (NSE) has outlined benefits of listing on its Alternative Securities Market (ASeM), a specialised board for the listing of emerging companies operating in Nigeria. The ASeM was developed to accommodate small to mid-sized companies, with high growth potential, seeking to access the capital market by raising long term capital.

    The NSE organised a road show in two commercial cities of Agbara and Abeokuta, Ogun State to showcase the ASeM to small and medium companies. At the road show, with the theme “Accessing Long Term Capital for Growth; The ASEM Platform”, the benefits of listing were discussed and participants were exposed to the opportunities available in the capital market.

    The need for small to mid-sized companies to formalise their businesses to becoming sustainable institutions was also demonstrated, seeking businesses that are ready to take the required next steps towards accessing the capital market.

    The NSE explained that there were three major pillars supporting ASeM including designated advisers-accredited capital market operators to prepare small and medium enterprises (SMEs) for listing and provide continuous financial advisory support throughout the listing life of the company; institutional services-a value adds of the NSE to help SMEs formalise their businesses, ahead of listing; and growth ambassadors-influential individuals to project the board to relevant stakeholders.

    Head, listings sales and retention, Nigerian Stock Exchange (NSE), Mrs. Taba Peterside who clearly defined the brand identity and value proposition of the board, noted that the introduction of designated advisers will assist ASeM companies meet post-listing obligations and support them as financial advisers.

    She explained that the Exchange has provided ASeM as a platform for sustainable growth and development of these companies.

    “Since the launch of ASeM, the NSE has proven that this is a major focus area. SMEs remain the drivers of growth in the Nigerian economy and the NSE is a staunch believer in the critical role of emerging enterprises in a developing economy. Recently in 2014 we witnessed a successful listing of Omoluabi Savings & Loans Plc, on ASeM on the Daily Official List of The NSE. There is a strong pipeline of companies that have commenced the process of listing, with more IPOs and listings expected on the board,” Peterside said.

  • Investors stake N46.5b on equities amidst recovery

    Investors stake N46.5b on equities amidst recovery

    The Nigerian stock market made a latter-day recovery last week to halt the gripping bearishness that had pervaded the market for eight days. But the gain of N443 billion within two days of recovery on Thursday and Friday could not cover the depreciation in the previous three days. Equities still closed the week with a loss of N151 billion, representing average week-on-week depreciation of 1.49 per cent.

    Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE), which had opened last week at N10.156 trillion, closed the week at N10.005 trillion. The All Share Index (ASI), the composite value-based index that doubles as benchmark for the stock market and country index for Nigeria, dropped from its week’s opening index of 30,763.38 points to close the week at 30,306.51 points.

    Driven by renewed bargain-hunting and cross deals, aggregate turnover was above average at 5.41 billion shares worth N46.47 billion in 22,986 deals. In the previous week, turnover stood at 1.81 billion shares valued at N28.918 billion in 20,677 deals.

    Financial services sector was the most active sector with 4.99 billion shares valued at N37.07 billion traded in 13,641 deals; representing 92.26 per cent and 79.77 per cent of the total equity turnover volume and value respectively. Conglomerates sector followed with a turnover of 186.25 million shares worth N723.491 million in 1,400 deals. Consumer goods sector placed third with 92.022 million shares worth N4.550 billion in 3,784 deals.

    The trio of Union Bank of Nigeria Plc, FBN Holdings Plc and Transnational Corporation of Nigeria Plc were the most active, accounting for 3.96 billion shares worth N29.09 billion in 4,493 deals, representing 73.24 per cent and 62.59 per cent of the total equity turnover volume and value respectively.

    Also, a total of 28,556 units of Exchange Traded Products (ETPs) valued at N531,541 were traded in 21 deals compared with a total of 1,299 units valued at N452,196 traded in 21 deals two weeks ago. A total of 9,000 units of FGN bonds valued at N9.849 million were executed in 5 deals compared with a total of 800 units valued at N825,011 transacted last week in 1 deal.

    Price movement analysis showed that 23 equities appreciated during the week, higher than 10 equities that appreciated in the preceding week. However, 51 equities depreciated, lower than 68 equities that declined in the previous week. One hundred and twenty three equities remained unchanged, higher than 119 that closed flat in earlier week.

  • NSE rewards essay winners

    How can Nigeria build a financially-savvy generation of youths? Answers to this question were provided by secondary school pupils in their entries submitted for 2014 Nigerian Stock Exchange (NSE) Essay competition.

    Miss Chiamaka Onuh Sophie, a Senior Secondary School (SSS) 3 pupil of Nikky T High School in Aba, Abia State, was declared winner of the contest at the grand finale ceremony held in Civic Centre on Victoria Island, Lagos.

    Chiamaka was presented with N700,000 cheque, which include scholarship worth N400,000 and N300,000 equity investment.

    The contest, which is sponsored by Access Bank Plc, is held yearly to encourage pupils in secondary schools across the nation apply real-world economic trend and research for the development of their knowledge in financial investment.

    The winners were selected through rigorous judging process by capital market professionals, who evaluated pupils’ entries. Contestants were judged according to their knowledge of stock market and factors that drive investments.

    Over 60 finalists nationwide were invited to take part in the second level assessment, which produced 10 national winners among whom three finalists.

    In his speech, the NSE Chief Executive Officer, Mr Oscar Onyema, said he was touched by the brilliance displayed by the pupils through their write-ups. With such wisdom, the nation’s future is bright, he said.

    He said: “In the past 14 years, the Nigerian Stock Exchange has, through this laudable initiative, positively impacted on the lives of many youths in various secondary schools.  I am particularly elated that NSE is championing this value-adding programme, which is targeted at promoting sound financial literacy among our youths.”

    In his remark, the Managing Director of Access Bank, Mr Herbert Wigwe, represented by Mr Elias Igbiakenzua, said the bank believes in the future of the country, which was why it partnered with the NSE to invest in pupils’ intellectual ability.

    Igbiakenzua said: “Access Bank has maintained a policy to pursue anything that is sustainable and one of such is the investment in the intellectual development of youths, which is what the NSE Essay competition stands for. We will continue to support the initiative for as long as it exists.”

    The first runner up is Blessing Ejike Mbilite of Beth Roots Model Secondary School in Onitsha, Anambra State, while the second runner up is Prince Dan Onmonya of Mount Saint Gabriel’s Secondary School in Makurdi, Benue State. They were given scholarship and equity investment N500,000 and N400,000 respectively.

     

  • PwC faults bill seeking compulsory listing on NSE

    A Bill known as Private Companies Conversion and Listing Bill, 2013 is undergoing legislative proceedings at the National Assembly, Head of Tax at PricewaterhouseCoopers (PwC) Nigeria, Taiwo Oyedele, has said.

    In an emailed report, the tax expert said the Bill seeks to compel private companies to convert to public companies by becoming listed on the Nigerian Stock Exchange (NSE). The thresholds for the mandatory conversion are shareholders fund in excess of N40 billion turnover or total assets of N80 billion, he explained.

    He said compelling private companies to list their securities contradicts extant laws such as Section 25 of the Nigerian Investment Promotion Commission Act which states unequivocally that “no person who owns, whether wholly or in part, the capital of any enterprise shall be compelled by law to surrender his interest in the capital to any other person”.

    Oyedele said that on face value, the Bill looks like a good initiative but a careful analysis suggests otherwise. “Nigeria with a Gross Domestic Product of $510 billion is the largest economy in Africa but the country’s capital market with a total capitalisation of about $80 billion is dwarfed by the Johannesburg Stock Exchange with market capitalisation of over $1 trillion as at the end of last year.

    South Africa did not achieve this by forcing private companies to list but rather through impeccable regulatory enforcement. The country is ranked first in the world in terms of regulation of securities exchanges in the World Economic Forum’s Global Competitiveness Survey for 2013 to 2014,” he said.

    He said a private company that meets any of the thresholds must be converted to a public company and be listed on the NSE within 12 months.

    According to the Bill, the conversion is aimed at promoting growth for both the company and the capital market.

  • NSE may downgrade Lafarge Africa from high-priced stocks’ list

    NSE may downgrade Lafarge Africa from high-priced stocks’ list

    The Nigerian Stock Exchange (NSE) may review the inclusion of Lafarge Africa Plc within the top-ranking “high-priced stocks” list following the steep depreciation of share price of the cement company.

    The NSE had in April included Lafarge Africa as one of the specially designated stocks known as high-priced stock.

    The “high-priced stocks”, according to the NSE categorization, are stocks with share prices of N100 and above and regular and pre-determined level of activities. In 2012, the NSE had alongside the introduction of market making introduced a pilot programme under which stockbrokers could move prices of “high priced stocks” with 10,000 shares as against the general operating rule of 50,000 shares for the movement of share prices of other stocks.

    There are 13 stocks categorised as “high-priced stocks” including Dangote Cement Plc, Guinness Plc, Mobil Plc, Nestle Plc, Nigerian Breweries Plc, SIM Capital Fund, Skye Shelter Fund, Nigerian Energy Sector Fund (NESF), Total Nigeria Plc, Lafarge Africa Plc, Seplat Petroleum Development Company Plc, Forte Oil Plc, Seven-Up Bottling Company and Lafarge Africa.

    While setting out the criteria for the “high-priced stocks”, head, market surveillance, Nigerian Stock Exchange (NSE), Mr. Abimbola Babalola had outlined that the benchmark price of N100 and liquidity are the two considerations for inclusion within the category.

    Lafarge Africa has since fallen below the N100 benchmark price, the only stock below the benchmark price among the “high-priced stocks”. It opened yesterday at N72 per share. Lafarge Africa is the worst-performing cement stock so far this year with a year-to-date price depreciation of 37.39 per cent at the opening of the market yesterday. Dangote Cement, which opened yesterday at N160, carried average year-to-date return of -26.94 per cent while Cement Company of Northern Nigeria (CCNN) placed third with -21.11 per cent. Ashaka Cement, which is a target of mandatory tender offer (MTO) by Lafarge Africa, is the only cement stock with positive return with 17.20 per cent.

    A source in the know of the review process for the “high-priced stocks” said the Exchange would not hesitate to remove any stock that falls short of the criteria for the group.

    According to the source, the Exchange will want to maintain the integrity of the ranking process for the “high-priced stocks” as the privilege of low-volume price movement is directly attached to meeting the criteria.

    Lafarge Africa had traded at a high of N136.73 per share, but it has failed to sustain the momentum as it grappled with shadow struggles for market control.

    Lafarge Africa is currently offering 261.58 million ordinary shares and N1.85 billion as equity and cash consideration for the take-over of the 41.39 per cent equity stake held by minority shareholders in Ashaka Cement Plc.

    Following the consolidation of Lafarge’s businesses in Nigeria and South Africa into Lafarge Africa, Lafarge Africa had acquired 58.61 per cent majority equity stake in Ashaka Cement. The majority equity stake was previously held by Lafarge Nigeria (UK) Limited. The acquisition was done through a block trade at the Nigerian Stock Exchange (NSE).

    Now, Lafarge Africa is seeking to acquire the remaining 41.39 per cent equity stake held by other shareholders in Ashakacem in furtherance of the consolidation of Lafarge’s businesses.

    A tender document showed that Lafarge Africa would be offering 57 ordinary shares of 50 kobo each in exchange for 202 ordinary shares of 50 kobo each of Ashakacem. In addition, Lafarge Africa will pay N2 for every acquired Ashakacem’s share.

    Minority shareholders hold 927.009 million ordinary shares of 50 kobo each in Ashakacem, representing 41.39 per cent of the cement company’s total outstanding shares. The tender offer is expected to close by 5pm on Friday January 16, 2015.

    The decline in Lafarge Africa has also overshadowed the valuation. Ashakacem’s share price has been stable at N24.60 per share with a market capitalisation of N55.09 billion. Lafarge Africa dropped by 98 kobo to N72 per share with a market value of N216.12 billion.

    The MTO was triggered by the transfer of 58.61 per cent majority equity stake in Ashaka Cement previously held by Lafarge Nigeria (UK) Limited. Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders.

    Lafarge had on July 9, 2014 received shareholders’ approval to consolidate its cement businesses in Nigeria and combine these with South African operations to create a leading sub-Saharan building materials giant to be known as Lafarge Africa Plc. The consolidation was done by transferring Lafarge’s assets in South Africa and Nigeria to Lafarge Cement Wapco Nigeria Plc.

    Under the transaction, Lafarge Group transferred its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria Limited, 35 per cent, Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited, 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.

     

  • CWG Nigeria’s next Alibaba, says NSE chief

    CWG Nigeria’s next Alibaba, says NSE chief

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema has said Computer Warehouse Group Plc (CWG) is capable of being the Alibaba of Nigeria, following the adoption of its subscription based business model known as CWG 2.0.

    He spoke when he led top management staff of the NSE on a working visit to CWG’s corporate headquarters in Lagos.

    He said: “From their subscription businesses which they call CWG 2.0, to their legacy business which is more infrastructure-based, CWG has done quite well. We have been to their Tier 3 Data centre which supports multiple businesses. We have seen their contact centre, where they handle inbound calls. In all, it is professionally run. We are quite excited at the possibility of growth and how the Company might be the next Alibaba for Nigeria.”

    Speaking about the performance of CWG since it was listed on the Exchange last year, Onyema said: “CWG has been a very good listed Company. They have complied with the pre and post listing standards. They have been a good ambassador of what it means to be listed on the Nigerian Stock Exchange.

    “As you know, at the World Economic Forum annual meeting in May, WEF recognised CWG as one of the Global Growth Companies in the world. So, we are very excited about their performance in the ICT sector of the Stock Exchange. They are the biggest security in the sector, and we are very happy at what they are doing.”

    According to Onyema, the visit is in line with the practice of the NSE. He noted that the visit is paid to listed companies by the Brokers’ Community so as to better understand their operations, which will in-turn equip brokers with the required information to advise clients, especially at the brokers level.

  • NSE woos Asian investors to Nigerian market

    The Nigerian Stock Exchange (NSE) has embarked on a roadshow to major Asian economic centres to highlight the potential of the Nigerian investment industry and woo investors to the Nigerian capital market.

    The roadshow, which started on Monday, will run all through this week and will take NSE and major quoted companies and operators to Singapore, Hong Kong and Beijing.

    Chief executive officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, said the main objective of the roadshow was to develop partnerships and improve deal flow into the Nigerian capital market.

    According to him, the roadshow is part of the NSE’s drive to increase participation by Asian investors in the Nigerian capital market.

    “The event will highlight the robustness of our capital market as well as showcase The Exchange and its listed companies and market operators. In each destination, participants will have the opportunity to interact with the major institutional investors and fund managers, and explore business opportunities,” Onyema said.

    He added that the roadshow themed “Investing on the Nigerian Stock Exchange: Investing, Partnerships & Governance”, will bring together African focused investors and fund managers to discuss ways to strategically position themselves, develop partnerships and expand into Nigeria in order to grow and gain competitive edge in the region’s high growth market.

    He pointed out that the meeting will explore the role of governance in facilitating trade and investment for businesses, and share insights on doing business successfully in Nigeria.

    Executive Director, business development, Nigerian Stock Exchange (NSE), Mr. Haruna Jalo-Waziri, said the Exchange was delighted to tell its story to the dynamic Asian market.

    “We are all familiar with major Asian direct investment into Nigeria, but our initial engagement with the Asian market also indicates considerable appetite for portfolio investment into our capital market, and we look forward to meeting their major financial institutions and corporates face to face,” Jalo-Waziri  said.

    According to him, with many people still unaware of Nigeria’s economic potential, the first challenge is to confront and overcome the perceptions that exist in the minds of some people outside Nigeria.

    “Asia has a considerable pool of investible finds looking for attractive opportunities and we need to inform their investors of the opportunities available in the Nigerian stock market,” Jalo-Waziri said.

     

  • NSE defers implementation of market volatility measure

    The Nigerian Stock Exchange (NSE) has suspended the implementation of a new rule that would empower it to; in the first instance of extraordinary market volatility, halt trading at the secondary market and in the event of continuing extreme volatility, close down the market for the day.

    The Rule 170, known as “Trading Halts Due to Extraordinary Market Volatility”, was supposed to take effect yesterday but the NSE stated that it has suspended the implementation of the new rule until further notice.

    The new rule empowers NSE to halt trading in all securities for 30 minutes in the event of five per cent market-wide decline as indicated by the All Share Index (ASI). The NSE’s circuit breakers will be triggered immediately once the ASI declined by five per cent.

    According to the rule, the market will be closed for the day if at the resumption of the 30-minute break, the, market witness further decline of five per cent.

    The NSE currently has a 10 per cent single-stock circuit breaker, which limits the daily allowable change in the price of any equity to 10 per cent. The ASI-based market-wide circuit breaker will operate in addition to the single stock limit.

    In the throes of the market recession in 2008, the market had declined by more than nine per cent in a day.

    “If a market move occurs after 10.15am and any time up to and including 13.45 pm, the Exchange shall halt trading in all stocks for 30 minutes. The Exchange shall not halt trading if a significant market move occurs after 13.45 pm. The Exchange shall halt and reopen trading based on a significant market move only once per trading day,” the rule stated.

    According to the rule, if following the reopening of trading after a significant market move halt, the All Share Index moves further by a minimum of five per cent below its closing value on the immediately preceding trading day, during any trading day the Exchange will halt all trading for the remainder of the day. The last traded price in any security prior to the closing of the market shall be deemed the closing price in such security for the day.

    In a supporting note to the rule, head, legal and regulation, Nigerian Stock Exchange (NSE), Tinuade Awe, said that the new rule was necessitated by the recent bearish trends in the market and the need to provide for an orderly and efficient market.

    According to her, the NSE believes that the trade-halt rule is relevant, meaningful and effective in today’s high-speed electronic securities markets.

    “Given the highly-automated nature of today’s markets and improvements in connectivity, the Exchange believes that a trading halt of 30 minutes would be sufficient to allow market participants an opportunity to assess a serious market decline and express their trading interest, with relatively little disruption to the market. Management is of the view that should the market decline by a further five per cent after an initial index circuit breaker trigger of per cent, for a total of 10 per cent; the market should be closed for the day. A 10 per cent market-wide move is highly unusual in this market, and time should be given for the market to recollect itself before opening the next day,” Awe stated.

    She pointed out that the new rule seeks to promote just and equitable principles of trade, remove impediments and improve the mechanism of a free and open market as well as protect investors and the public interest.

    She said the NSE expected that triggering of the index circuit breakers will be a relatively rare event that will address severe market declines and enable stabilization in the market and in view of the short duration of their intervention, the circuit breakers should still be able to accomplish their goal.