NSE Issues New Rules on Share Price Movement
The Nigerian Stock Exchange (NSE) yesterday announced some measures aimed at checking arbitrary movement in the prices of shares in the stock market. The prices of many stocks, including dormant companies, have witnessed unprecedented appreciation in recent months, raising fears of a possible crash.
At a point, the Securities and Exchange Commission had to step in to institute a probe of some suspected price manipulations.
Disclosing some of the decisions to check the trend, the Assistant Director-General of the NSE, Mr. Lance Elakama, said a new rule on price movement has been introduced.
The new rule stipulates that for a stockbroker to move the share price of any company, either downwards or upwards, the broker must have a minimum of 100,000 units.
This is as against the old rule that required only 15,000 units for prices to move.
Another new rule, according to Elakama, is that any company listing its shares for the first time must make 10 per cent of the shares available for trading.
This, he said, would create more liquidity in the market. He explained that the non-availability of shares of newly listed company was being used to drive up the prices of such companies.
He added that once a company is newly listed, its performance would be monitored for one year before it is allowed to access the market for more funds.
More so, the price movement on the shares of dormant companies would not be allowed unless they meet the rule of minimum 100,000 units.
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