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Tag: Stock Exchange

  • Stock Exchange approves delisting of Paints & Coatings Manufacturers Nigeria

    The Quotation Committee of the Nigerian Stock Exchange (NSE) has approved the voluntary delisting of Paints and Coatings Manufacturers Nigeria (PCMN) Plc, paving the way for its relapse to a private limited liability company.

    The delisting approval was sequel to compliance with delisting rules by PCMN, including approvals by its shareholders and the Federal High Court.

    The NSE had earlier suspended trading on PCMN shares with effect from May 30, 2018, in line with the effective date for determining shareholders, who will qualify to receive the scheme shares ahead of the implementation of the voluntary delisting of the company.

    PCMN shareholders had earlier this year approved sub-joined resolutions that will see the relapse of the company to a private limited liability company and the delisting of its shares from the NSE.

    A Federal High Court had directed the company to convene a court-ordered meeting on February 15, 2018 in Lagos where shareholders deliberated and voted to approve a scheme of arrangement for the change in the status of the company and the delisting from the NSE. A new company-Paintcom Investment Nigeria Limited is proposed to emerge after the delisting.

    The Asset Management Corporation of Nigeria (AMCON) recently sold the fourth largest equity in PCMN to Bizfeat Ventures Limited, a relatively unknown firm. AMCON, the bad-debt resolution corporation floated by the government, transferred its 7.4 per cent stake in PCMN to Bizfeat Ventures through a negotiated cross deal at the NSE.

    The block divestment involved transfer of 58.66 million ordinary shares of 50 kobo each held by AMCON to Bizfeat Ventures at a negotiated price of N1.05 per share.

    The NSE operates two delisting windows-voluntary and compulsory. Under voluntary delisting, quoted companies can opt to delist their shares from the Exchange due to various reasons including mergers and acquisitions, restructuring and private interests subject to fulfilment of the delisting rules and requirements.

    Under the compulsory delisting window, the NSE may opt to delist companies that have failed repeatedly to meet extant rules and best practices in line with the Exchange’s commitment to protect investors and ensure that listed companies comply with global best practices.

  • Stock Exchange improves equities efficiency with new trading structure

    The Nigerian Stock Exchange (NSE) will next week launch a new market structure aimed at creating an optimal market design, which facilitates improved market depth, liquidity provision and price efficiency.

    The improved market structure, which will be launched on July 1, 2018, will create a level playing field for all market participants, and allow for the creation of new trading strategies. Under the new market structure, market makers and other dealing members will be able to participate across all trading sessions, which will further support competitive pricing, reduce spreads, and best execution.

    NSE Chief Executive Officer, Mr Oscar Onyema, said the equities market structure review  was carried out to support the Exchange’s hybrid market model, which offers the benefits of best execution and tighter spreads to investors.

    “Moreover, it provides potential for cheaper cost of capital to issuers in our market. This market structure is in line with our 2018 to 2021 corporate strategy aimed at boosting retail investor participation,” Onyema said.

    He reiterated the Exchange’s commitment to maintaining a platform that engenders a fair and efficient market in line with global standards.

    The NSE will also on July 1, 2018 review its NSE 30 index and all other six sectoral indices, including NSE Consumer Goods Index, NSE Banking Index, NSE Insurance Index, NSE Industrial Index, NSE Oil & Gas Index and NSE Lotus Islamic Index. The composition of the indices after the review will be effective on July 1, 2018. The review will witness the entry as well as exit of some major companies. The UAC of Nigeria is expected to be added to the NSE 30 Index- which tracks the 30 largest companies at the Exchange. Jaiz Bank will be added to the NSE Banking Index while Seplat Petroleum Development Company is expected to be added to the NSE Lotus Islamic Index, which brings the indigenous oil and gas into the basket of ethical stocks.

  • Stock Exchange mulls new platform for SMEs

    The Nigerian Stock Exchange (NSE) is considering creation of a special-purpose platform to nurture small and medium scale enterprises (SMEs) by providing them with opportunity to list their shares and raise capital from the stock market.

    The new board, to be known as the ‘Growth Board’, is designed to support the growth of SMEs as part of the strategic initiatives by the Exchange to enhance its traditional roles as catalyst for economic growth and development.

    According to the draft document on the new board, the Exchange’s traditional role as an enabler of capital flow from areas of surplus to deficit holds good promise for its capability to support SMEs as access to capital is the prime challenge faced in the SME sector.

    The Exchange stated that it decided to have a dedicated board for SMEs because the capabilities of most SMEs do not allow them to meet stringent listing and post-listing requirements and fees required for listing on the other boards of the Exchange.

    The ‘Growth Board’ will recognise and encourage the listing of fast growing companies that are active in their respective sectors, and have exhibited high growth potential.

    According to the Exchange, the objective of the ‘Growth Board’ is to develop a listing board that is suited to the needs of start-ups and SMEs that will act as a vehicle to attract fast growing issuers to list on the Exchange, increase overall market capitalisation and order flow in line with the Exchange’s strategic objectives.

    Stock Exchange

  • Stock Exchange lifts suspension on Ikeja Hotel

    The Nigerian Stock Exchange (NSE) has lifted its one and a half years suspension on trading in the shares of Ikeja Hotel, paving the way for resumption of trading in the shares of the hospitality and tourism company.

    Ikeja Hotel’s share price rose by 4.49 per cent or 8.0 kobo to close at N1.86 per share during trading on Monday at the NSE.

    Head, Listings Regulation Department, Nigerian Stock Exchange (NSE), Godstime Iwenekhai, said the Quotations Committee of the National Council of the Exchange had on Friday May 11, 2018 approved the lifting of the full suspension.

    The board and management of Ikeja Hotel had also on Friday May 18, 2018 provided a status update to the market during an interactive session on the underlying facts behind the restructuring of the company. The interim board of the company indicated that it has undertaken considerable resolutions of the challenges facing the company.

    Iwenekhai stated that the Securities and Exchange Commission (NSE) has been notified of the lifting of suspension, in line with extant rules at the capital market.

    The NSE had in November 2016 suspended trading on the shares of Ikeja Hotel Plc in response to the high-stake dispute in the Ibru family. The Ibrus own the majority shareholdings in the hospitality and tourism company.

    The full suspension on Ikeja Hotel implied no trading whatsoever in the shares of the company. Unlike technical suspension where trading can take place without price movement, full suspension disallows both trading and price movement.

    The Exchange noted that the full suspension was taken “to safeguard the investments of shareholders of Ikeja Hotel Plc following the continued dispute between the major shareholders which has negatively impacted on the company’s governance structure”.

    The NSE stated that it acted pursuant to the provisions of rule 15.45: suspension on trading of securities, rulebook of the Exchange, 2015. The suspension took effect on November 10, 2016.

    In May 2017, SEC dissolved the board of directors of Ikeja Hotels Plc and ordered a forensic investigation into the affairs of the hospitality and tourism company. The Commission appointed Chief Anthony Idigbe (SAN) as the interim chairman for the company.

    The apex capital market regulator said it took the decision to sack the board due to unresolved internal crisis involving some majority shareholders of Ikeja Hotels Plc, in apparent reference to the squabbles within the Ibru family, which holds the largest shareholdings in the company.

     

  • Stock Exchange lifts suspension on Ikeja Hotel

    The Nigerian Stock Exchange (NSE) yesterday lifted its one and a half years suspension on trading in the shares of Ikeja Hotel, paving the way for resumption of trading in the shares of the hospitality and tourism company.

    Ikeja Hotel’s share price rose by 4.49 per cent or 8.0 kobo to close at N1.86 per share during trading yesterday at the NSE.

    Head, Listings Regulation Department, Nigerian Stock Exchange (NSE), Godstime Iwenekhai, said the Quotations Committee of the National Council of the Exchange had on Friday May 11, 2018 approved the lifting of the full suspension.

    The board and management of Ikeja Hotel had also on Friday May 18, 2018 provided a status update to the market during an interactive session on the underlying facts behind the restructuring of the company. The interim board of the company indicated that it has undertaken considerable resolutions of the challenges facing the company.

    Iwenekhai stated that the Securities and Exchange Commission (NSE) has been notified of the lifting of suspension, in line with extant rules at the capital market.

    The NSE had in November 2016 suspended trading on the shares of Ikeja Hotel Plc in response to the high-stake dispute in the Ibru family. The Ibrus own the majority shareholdings in the hospitality and tourism company.

    The full suspension on Ikeja Hotel implied no trading whatsoever in the shares of the company. Unlike technical suspension where trading can take place without price movement, full suspension disallows both trading and price movement.

    The Exchange noted that the full suspension was taken “to safeguard the investments of shareholders of Ikeja Hotel Plc following the continued dispute between the major shareholders which has negatively impacted on the company’s governance structure”.

    The NSE stated that it acted pursuant to the provisions of rule 15.45: suspension on trading of securities, rulebook of the Exchange, 2015. The suspension took effect on November 10, 2016.

    In May 2017, SEC dissolved the board of directors of Ikeja Hotels Plc and ordered a forensic investigation into the affairs of the hospitality and tourism company. The Commission appointed Chief Anthony Idigbe (SAN) as the interim chairman for the company.

    The apex capital market regulator said it took the decision to sack the board due to unresolved internal crisis involving some majority shareholders of Ikeja Hotels Plc, in apparent reference to the squabbles within the Ibru family, which holds the largest shareholdings in the company.

    In a statement announcing the dissolution, SEC described the dissolution as proactive measure in order not to allow the warring parties to take certain actions that would give them an advantage over one another.

    Ikeja Hotel, incorporated in 1972 and quoted on the NSE in 2007, controls a chain of hotels directly and through other subsidiaries and affiliates including Tourist Company of Nigeria (TCN) Plc and Capital Hotel Plc. Ikeja Hotel owns Sheraton Hotel, Ikeja, Lagos. TCN owns Federal Palace Hotel while Capital Hotel owns Abuja Sheraton Hotel. The Ibru family owns the single largest individual shareholding.

    SEC noted that it had, in a bid to forestall chaos in the company, in conjunction with other distinguished personalities had previously held various meetings with the existing board towards resolving the crises but the company continues to be plagued with unhealthy corporate governance practices in disregard with the code of corporate governance for public companies.

    According to the Commission, as a public company, it is paramount that the activities of the company are conducted within the confines of existing corporate governance regulations in the Nigerian capital market, to ensure the protection of minority shareholders and other investors.

  • Stock Exchange delists two firms

    •African Paints, Afrik Pharmaceuticals fail governance test

    The Nigerian Stock Exchange (NSE) has delisted African Paints (Nigeria) Plc and Afrik Pharmaceuticals Plc from the secondary market, ending more than two decades of public quotation for the ailing firms.

    African Paints, which deals in agro-chemicals, general chemicals and paints, was incorporated in 1974 and listed on the NSE in 1996. Imo State-based Afrik Pharmaceuticals was incorporated in 1972 and listed on the Exchange in 1992.

    A circular on the firms delisting  indicated that their shares were delisted at the weekend following approval of the National Council of the NSE.

    The NSE said the firms were delisted after failing severally to comply with best practices as enshrined in post-listing requirements at the Exchange.

    According to the Exchange, it had engaged the companies with a view of returning them to compliance level. When the efforts did not yield results, the NSE sent out a delisting notice on October 13, 2016. However, the companies did not take appropriate steps to regularise their listing status.

    Further to the exercise, the  Exchange notified the companies of its intention to delist them from the daily official list due to their non-compliance with provisions of the Post-Listing Rules on April 11, 2017 through two newspaper publications on April 20, last year.

    The Exchange granted them  additional three months to cure their compliance deficiencies. But, they failed to take steps to regularise their compliance status within the stipulated time.

    “In spite of this, the Exchange continued to engage these companies, but they did not take to the requisite steps to come into compliance, consequent upon the forgoing, the Exchange has proceeded with the delisting of these entities from the Daily Official List,” the NSE stated.

    The Nation in an exclusive report last January reported that six quoted companies were under the watch-list of the NSE for compulsory delisting of their shares from the stock market due to recurring failures to comply with international best practices and corporate governance rules at the market.

    The report noted that the companies were on the delisting watch-list of the Exchange, a list of companies with serious infractions that require considerable organisational changes to comply with the extant rules at the market. The companies included Aso Savings & Loans Plc, African Paints (Nigeria) Plc, Deap Capital Management Plc, Afrik Pharmaceuticals Plc, Evans Medical Plc and Union Homes Savings & Loans Plc.

    The report indicated that the Quotation Committee of the Exchange, which oversees listing and delisting had approved the delisting process of the six companies.

    The NSE operates two delisting windows-voluntary and compulsory delisting. Under voluntary delisting, quoted companies can opt to delist their shares from the Exchange due to various reasons including mergers and acquisitions, restructuring and private interests subject to fulfilment of the delisting rules and requirements.

    Under the compulsory delisting window, the NSE may opt to delist companies that have failed repeatedly to meet extant rules and best practices in line with the Exchange’s commitment to protect investors and ensure that listed companies comply with global best practices.

    The NSE had delisted five companies in 2017 with four of them delisted under compulsory delisting due to infractions and poor corporate governance. The four companies delisted in 2017 included Beco Petroleum Products, MTECH Communications, Mass Telecommunication Innovation (MTI) and UTC.           Ashaka Cement, which merged with its parent company, Lafarge Africa, was delisted under voluntary delisting option.

    In December 2016, the Exchange had delisted six companies, including Lennards (Nigeria) Plc, P.S Mandrides & Company Plc, Premier Breweries Plc, Costain (W.A) Plc, Navitus Energy Plc and Nigerian Ropes under compulsory delisting window.

    It had in May 2016 compulsorily delisted eight companies, including IPWA Plc, G.  Cappa Plc, West African Glass Industries Plc (WAGI), Investment & Allied Insurance Plc, ALUMACO Plc, Jos International Breweries Plc, Adswitch Plc and Rokanna Plc.

  • Stock Exchange expels three brokers over shares ‘fraud’

    The Nigerian Stock Exchange (NSE) Council has expelled three stockbrokers for alleged misappropriation and fraudulent sale of client’s shares.

    A March 28 circular obtained by The Nation stated that the registration of Mr. Victor Ogiemwonyi, Mr Joel Okafor and Mrs Ladi Barbara Onwordi had been revoked as authorised  dealing clerks of the Exchange. Consequently, they shall not be allowed to participate in trading or owning a trading firm at the Exchange.

    The circular said the Disciplinary Committee of the NSE, which oversees ethics and compliance, indicted them for alleged misappropriation and unauthorised sale of client’s shares.

    Okafor and Onwordi, who were members and authorised dealers on the Exchange, were stripped of their registration and trading authority for allegedly selling their clients’ shares without the mandate.

    Ogiemwonyi, who has been at the centre of an alleged multi-billion naira capital market fraud, was expelled for “misappropriation of clients” funds. Ogiemwonyi, a fellow and former council member of the Chartered Institute of Stockbrokers (CIS) and former council member of the NSE, had earlier been indicted by the Administrative Proceedings Committee (APC) – the adjudicatory arm of the Securities and Exchange Commission (SEC).

    “Note that Mr. Okafor cannot be employed in any capacity, appointed as a director or have shareholdings of 5.0 per cent and above in any dealing member firm or sub-broker,” the circular signed by Head, Broker Dealer Regulation, NSE, Olufemi Shobanjo, said.

    A compliance officer with Ogiemwonyi’s firm, Partnership Securities Limited, Mr. Fisayo Ibrahim Jassey-Jabarr, was suspended for five years for alleged failure to report regulatory breaches during his tenure.

    “Dealing members are advised not to engage in any activity with the above listed individuals,” the Exchange warned.

    With the expulsion, the indicted stockbrokers will also not be able to work in any stockbroking and investment firms in Nigeria, according to Rule 6, (12) of the NSE Rules.

    Under the rule known as “Specific Actions Requiring Prior Consent of The Exchange”, a dealing member shall not be allowed to employ some categories of persons without the prior written consent of the Exchange.

    These included directors, authorised clerks or other persons including principal officers such as the chief executive officer, chief finance officer, chief compliance officer and chief risk officer, who have been indicted by the NSE or Securities and Exchange Commission (SEC).

    Others included any person who was an officer or employee of a dealing member expelled from the Exchange, any person expelled, as an authorised clerk or its equivalent, from any other exchange, any person refused admission as a member of the Chartered Institute of Stockbrokers or any person expelled from its membership, any person expelled as a member of any professional association or institute and any person who is insolvent or has been convicted of theft, fraud, forgery, or any other crime involving dishonesty.

    As financial pressure mounts on stockbrokers and stockbroking firms due to the prolonged downtrend at the stock market, authorities at the Nigerian stock market have stepped up concerted efforts to checkmate unauthorized sales of clients’ shares.

    The Nation had reported exclusively that the Economic and Financial Crimes Commission (EFCC) was investigating 10 stockbroking firms and 12 individual stockbrokers and officials as part of a large-scale crackdown on shares fraud that had seen 31 stockbroking firms and several stockbrokers internally investigated and sanctioned by the NSE in recent years.

    Two official reports on shares fraud had indicated that the NSE had invited the EFCC to further investigate and prosecute 12 stockbroking firms and 21 stockbrokers and officials, who were primarily indicted by the internal investigations of criminal financial fraud.

     

  • Stock Exchange modifies one kobo base price

    •Floor price for equities now 20 kobo

    With several stocks on a free fall, the Nigerian Stock Exchange (NSE) has modified its one-kobo base pricing method, replacing it with a stopgap minimum price of 20 kobo for quoted equities.

    The NSE last Monday began the implementation of its amendments to the method and par value rules, which removed the stopgap, mostly 50 kobo that had supported several stocks at their nominal value.The method allowed shares of quoted companies to trade as low as one kobo.

    The new rules stipulated that “notwithstanding its par value, the price of every share listed on the Exchange shall be determined by the market, save that no share shall trade below a price floor of one Kobo per unit”.

    The Nation had reported that more than two-thirds of quoted companies fall under the category of the most vulnerable stocks to the one-kobo base.

    Within two months of the implementation of the method, most stocks that had hung on the 50 kobo nominal value, especially in the insurance sector, crashed by more than an average of 54 per cent.

    Sources said the NSE became concerned when the free-falling stocks breached the 20 kobo mark with UNIC Diversified Holdings Plc hitting all-time low of 18 kobo. The Exchange then placed a temporary suspension on trading in the shares of UNIC Diversified Holdings, citing an observed trading anomaly.

    After a review, the Exchange decided to reintroduce a stopgap of 20 kobo for quoted equities. The share price of UNIC Diversified Holdings was also adjusted upward to 20 kobo in line with the new band.

    With the modification, stocks under Category C under the pricing method will have a minimum price floor of 20 kobo. With this, the prices of securities that are in this category will not fall below 20 kobo.

    An investment banking source said while the one-kobo base rule had improved liquidity and restarted relatively active trading in many dormant stocks, it exposed the vulnerabilities of a large chunk of quoted equities. The source noted that there were concerns that many stocks could become targets of aggressive and hostile acquisitions, given their low valuations.

    The declining share prices also worsened the prospects of new capital raising for many stocks, especially in the populous insurance sector, where about 70 per cent of the quoted stocks have since fallen below their nominal value since the implementation of the new rule. For instance, Consolidated Hallmark Insurance, which had recently offered rights issue at 50 kobo per share, has since fallen to 25 kobo, implying 50 per cent loss for shareholders.

    The recent amendments to the pricing technology at the stock market had seen a categorisation of quoted companies under three groups with different pricing rules.

    The tick size – the minimum price movement by which the price of a trading instrument can change-will also be lowered to as low as one kobo, although all quoted companies shall continue to trade within the current pricing band of 10 per cent maximum allowable change per day.

    Under the new groupings and pricing rules, stocks under the first category-Group A, shall consist of large-cap equities that are priced at N100 per share or above for at least four of the last six trading months, or new security listings that are priced at N100 or above at the time of listing on the Exchange.

    The second category – Group B, shall consist of medium-priced equities that are priced at N5 per share or above but less than N100 per share for at least four of the last six months, or new security listings that are priced at N5 per share or above but less than N100 per share at the time of listing on the Exchange.

    The third category-Group C, where majority of listed companies fall, shall consist of equities that are priced at one kobo per share or above but below N5 per share for at least four of the last six months, or new security listings that are priced at one kobo per share or above but below N5 per share at the time of listing on the Exchange.

    The new rules expectedly link price movements and minimum quantity of equities traded that will change the published price of an equity security.

    Stocks under Group A shall have price change with minimum of 10,000 units.

    stocks under Group B shall have price movement with a minimum of 50,000 units while stocks under Group C shall have price change with minimum volume of 100,000 units.

    The tick size-the minimum price movement that any equity shall trade, shall also be linked to the groups. Group A will have a tick size of 10 kobo, Group B, five kobo while Group C will have a tick size of one kobo. This implies that the share price of each stock shall be allow to move up or down in multiples of its tick size.

    A classification guideline for the implementation of the new pricing methodology had indicated that about 67 per cent or 116 of quoted companies were under the immediate pricing band of one kobo, 27 per cent under a band of 5.0 kobo while the remaining 6.0 per cent were under a band of 10 kobo.

     

     

     

  • Lawyer seeks to stop MTN’s listing on Stock Exchange

    alAGOS lawyer, Dr. Charles Mekwunye, has urged the Court of Appeal to restrain MTN from listing its shares on the Nigerian Stock Exchange (NSE), pending the determination of a suit involving him, the telecom giant and four other firms.

    In the appeal marked CA/L/1349/16, Mekwunye is praying for an interlocutory injunction restraining MTN from listing its shares on THE NSE or any globally recognised stock exchange.

    Other prayers include an injunction restraining MTN from putting up signs, advert or notice which may suggest the listing of its shares.

    An order of interlocutory injunction restraining MTN from inviting the public to buy or purchase its shares in any public offer pending the determination of the appeal.

    The appellant is also asking the court to reverse the alleged interference of IHS Holding and INT Tower in the agreement among him, MTN, Lotus Capital and Stanbic IBTC Management Limited.

    Mekwunye sued MTN at the Federal High Court, Lagos for alleged breach of an agreement by firms representing the company in a privately placed share units offer.

    Joined in the suit as co-defendants were Lotus Capital Limited, Stanbic IBTC Asset Management Limited, IHS Holding Limited and INT Towers Llmited.

    Mekwunye contended at the Federal High Court that after buying about 5,000 MTN Linked Units share through MTN’s nominee, Stanbic IBTC Asset Management Limited via a private placement memorandum, the firm failed to fulfill its obligation of converting the share units into MTN Nigeria shares.

    But ruling on a preliminary objection raised by MTN on the competence of the suit, Justice Mojisola Olateru asked parties to explore the arbitration clause embedded in the disputes contract.

    Dissatisfied with the ruling of the lower court, Mekwunye through a motion on notice filed on February 26, approached the Court of Appeal.

    He insisted in the appeal papers that the crux of the matter is the failure of the respondents to list MTN shares in NSE in 2013 as agreed by parties and that until the suit or appeal is properly determined, MTN ought not be allowed to list its shares at the stock market.

    In an affidavit in support of the motion on notice, the appellant averred that sometime in February, 2008, Lotus Capital and Stanbic IBTC Asset Management via a private placement memorandum, represented that MTN International was offering to allocate shares of MTN Nigeria to the Nigerian public as investors through private placement arrangement.

    According to the deposition, Stanbic IBTC Asset Management which was appointed as nominee for the  MTN linked offer, subsequently engaged Lotus Capital Limited to procure investors.

    Mekwunye bought 5,000 units of the shares at the rate of $122,800 (N18, 376, 800,00).

    The appellant averred that the nominee structure as spelt out in the agreement papers was to last for three months after which the shares will be transferred to an exit special purpose vehicle (SPV) which will then be exchanged for MTN Nigeria shares.

    According to the appellant, at the end of three years, the respondents failed to create the agreed exit SPVon the ground that MTN International is already quoted on the Johannesburg Stock Exchange.

    He further averred that the respondents opted to create an alternative exit mechanism which is not listed on NSE without his consent or knowledge.

    Mekwunye claimed that series of deductions were made on his share units by the respondents in the new agreement which he never gave his consent.

    No date has been fixed for the hearing.

  • Stock Exchange mulls stabilisation plan for new listings

    The Nigerian Stock Exchange (NSE) is considering a trading arrangement that will allow specified agent to buy shares or other newly listed securities with a view to stabilise the price of such shares or securities within a period.

    A draft of the rules on “Rules for Price Stabilization of Securities” obtained at the weekend will allow an agent-to be known as stabilisation manager, to buy shares or other newly listed securities within the immediate period of listing to checkmate negative price fluctuation.

    Hanley et al (1993) in Journal of Financial Economics described price stabilisation as a regulatory framework for ‘the buying of a security for the limited purpose of [preventing or] or retarding a decline in its open market price in order to facilitate its distribution to the public’.

    In a circular on the new rules, the Exchange noted that the price stabilisation is aimed at supporting and maintaining the price of listed securities for a limited period after the listing or offer, thus establishing an orderly market for securities in the immediate secondary market after an offer.

    Executive Director, Regulation, Nigerian Stock Exchange (NSE), Tinuade Awe, said the the purpose of the proposed Rules for Price Stabilization of Securities is to define the circumstances and manner in which price stabilization will be permitted by the Exchange, in accordance with the provisions of the Investments and Securities Act (ISA), Consolidated Rules and Regulations of the Securities and Exchange Commission, 2013 (SEC Rules), and the Rulebook of The Exchange.

    She noted that the proposed rules address the parameters of substantive price support in securities offerings while they also serve as a defence to the necessary extent against prohibited trading practices, such as market manipulation, and breach of market abuse rules.

    “Given that transparency is a prerequisite for the prevention of market abuse, it is important to ensure that adequate information is disclosed or reported prior to, during, and after any trading effected for the stabilization of securities, in order to avoid market abuse and illegal market practices. In addition, market integrity requires adequate public disclosure of stabilisation measures. Reporting of the stabilisation transactions is also necessary to allow competent authorities to supervise stabilisation measures,” Awe said.

    She outlined that the proposed rules include definition of key terms, permitted price stabilisation and permitted stabilising activities, over-allotment, requirements for price stabilisation, stabilisation period, price conditions, eligibility criteria for stabilisation managers, responsibilities of the stabilisation manager, disclosure and reporting obligations of the stabilisation manager among others.

    Eligible securities for price stabilisation will include shares in an initial public offering, securities equivalent to shares, stock units of a unit trust, debt securities including convertible and exchangeable debt securities under an offering to be listed and traded on the Exchange.

    Stabilisation period shall not exceed 30 calendar days from the date of listing, or 30 calendar days from the first day of the trading of the securities in the offering, as may be applicable.