Nigerian Stock Exchange

The Nigerian Stock Exchange
Formation 1960
Purpose Listing and trading of securities
Headquarters Lagos, Nigeria
Official language
English
Key people
 Oscar N. Onyema, Ade Bajomo
Website http://www.nse.com.ng

The Nigerian Stock Exchange (NSE) was established in 1960 as the Lagos Stock Exchange. In 1977, its name was changed from the Lagos Stock Exchange to the Nigerian Stock Exchange. As of June 28, 2016, it has about 180 listed companies with a total market capitalization of about N10.16 trillion. All listings are included in the Nigerian Stock Exchange All Shares index. In terms of market capitalisation, the Nigerian Stock Exchange is the third largest stock exchange in Africa.

History

The Nigerian Stock Exchange was founded in 1960 as the Lagos Stock Exchange,[1] on September 15, 1960, the stock exchange council was inaugurated. Operations began officially on August 25, 1961 with 19 securities listed for trading but informal operations had commenced earlier in June, 1961. Operations were initially conducted inside the Central Bank building with the exchange having four firms as market dealers: Inlaks, John Holt, C.T. Bowring and ICON (Investment Company of Nigeria]].[2] The volume for August, 1961, was about 80,500 pounds and it rose to about 250,000 pounds in September of the same year with the bulk of the investments in government securities.[3] In December 1977 it became known as The Nigerian Stock Exchange, with branches established in some of the major commercial cities of the country.

Operation

The NSE is regulated by the Securities and Exchange Commission, which has the mandate of Surveillance over the exchange to forestall breaches of market rules and to deter and detect unfair manipulations and trading practices.[4] The Exchange has an automated trading System. Data on listed companies' performances are published daily, weekly, monthly, quarterly and annually.

The Nigerian Stock Exchange has been operating an Automated Trading System (ATS) since April 27, 1999, with dealers trading through a network of computers connected to a server. The ATS has facility for remote trading and surveillance. Consequently, many of the dealing members trade online from their offices in Lagos and from all the thirteen branches across the country. The Exchange is in the process of establishing more branches for online real time trading. Trading on The Exchange starts at 9.30 a.m. every business day and closes at 2.30 p.m.

In order to encourage foreign investment into Nigeria, the government has abolished legislation preventing the flow of foreign capital into the country. This has allowed foreign brokers to enlist as dealers on the Nigerian Stock Exchange, and investors of any nationality are free to invest. Nigerian companies are also allowed multiple and cross border listings on foreign markets.

Pricing

The Nigerian Capital Market was deregulated in 1993. Consequently, prices of new issues are determined by issuing houses and stockbrokers, while on the secondary market prices are made by stockbrokers only. The market/quote prices, along with the All-Share Index plus NSE 30 and Sector Indices, are published daily in The Stock Exchange Daily Official List, The Nigerian Stock Exchange CAPNET (an intranet facility), newspapers, and on the stock market page of the Reuters Electronic Contributor System.

Regulation

The NSE is regulated by the Securities and Exchange Commission, which has the mandate of Surveillance over the exchange to forestall breaches of market rules and to deter and detect unfair manipulations and trading practices.[3] The exchange has an automated trading System. Data on listed companies' performances are published daily, weekly, monthly, quarterly and annually.

Transactions on The Exchange are regulated by The Nigerian Stock Exchange, as a self-regulatory organization (SRO), and the Securities & Exchange Commission (SEC) – apex regulator, which administers the Investments & Securities Act of 2007.

The All-Share Index

The Exchange maintains an All-Share Index formulated in January 1984 (January 3, 1984 = 100). Only common stocks (ordinary shares) are included in the computation of the index. The index is value-weighted and is computed daily. The highest value of 66,371.20 was recorded on March 3, 2008. Also, The Exchange has introduced the NSE-30 Index, which is a sample-based capitalization-weighted index plus four sectorial indices. Similarly, five sectoral indices have been introduced to complement existing indices. These are NSE-Food/Beverages Index, (Later renamed NSE – Consumer Goods Index) NSE Banking Index, NSE Insurance Index, NSE Industrial Index and NSE Oil/Gas Index.[5]

Associations

The Nigerian Exchange is a member of the World Federation of Exchanges (FIBV). It is also an observer at meetings of International Organization of Securities Commissions (IOSCO), and a foundation member of the African Stock Exchanges Association (ASEA). On 31 October 2013, it joined the United Nation's Sustainable Stock Exchanges (SSE) initiative.[6] The NSE is regulated by the Securities and Exchange Commission, which has the mandate of Surveillance over the exchange to forestall breaches of market rules and to deter and detect unfair manipulations and trading practices.[3] The exchange has an automated trading System. Data on listed companies' performances are published daily, weekly, monthly, quarterly and annually.

See also

References

  1. ↑ "The Stock Exchange". Nigerian Stock Exchange. Retrieved 2012-06-08.
  2. ↑ Opening of Lagos Stock Exchange. The Financial Times (London, England),Thursday, June 15, 1961; pg. 5; Edition 22,417
  3. ↑ Good Start on Lagos S. E. The Financial Times (London, England),Tuesday, October 24, 1961; pg. 5; Edition 22,528
  4. ↑ "What We Do". SEC Nigeria. Retrieved 2011-06-08.
  5. ↑ "All-Share Index". NSE. Retrieved 2012-06-09.
  6. ↑ "Nigerian Stock Exchange joins United Nations Sustainable Stock Exchanges Initiative". UNCTAD. Retrieved 9 May 2014.
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