Following the financial meltdown that befell the Nigerian capital market around the middle of March this year, regulatory authorities were quick to come up with interventory measures to forestall the state of the market and revive investors confidence in a market that was once the toast of every investor. Even the interest of the federal government was awakened as it felt the plight of investors.
After due consultations were made some of the decisions reached included the
- Suspension of the N 1 billion capitalization for Stock brokerage firms.
- Postponing the uniform fiscal year-end deadline for commercial banks from December 31, 2008 to December 31, 2009.
- Issuance of an exemption to the provisions of the relevant sections of CAMA, to permit quoted companies to buy back up to 20 per cent of their shares to curb the spate of bearish trading in the market by the office of the Attorney General of the Federation.
- Allowance of one percent maximum downward limit on daily price movement , while retaining the current five per cent limit on upward movement.
- Reduction of the NSE fees by 50 percent effective September 8, 2008.
- Policy reversal to allow commercial banks to continue extending margin loans to inventors.

Amongst the above mentioned the allowance of one percent maximum downward limit on daily price movement was quick to be effected. Although these development helped to sustain the price of stocks because as at the time of its enactment the free fall was heart breaking, stock pundits vehemently disagreed with it arguing that the development had an upward bias and were of the view that the market should be left to move with the forces of demand and supply. This option they believed was the way out of the disaster rocking the market.

After a lot had been said and done, on Tuesday this week the Director-General of the NSE, Professor (Mrs.) Ndi-Okereke-Onyiuke, announced the removal of the controversial one per cent ceiling on downward price movement of listed equities traded on the Exchange, reverting to the former regime of five per cent. She also announced a downward review in the quantity of shares required to drive the prices of shares on the NSE. According to her, the volume of shares required to drive prices of listed equities is reviewed from 100,000 units to 50,000 units. In her words “We discovered that the number of units to move price could not be easily met by some companies whose total share volume are relatively small.
“This made us to bring down the number of shares required to move price either upward or downward, from 100,000 to 50,000 units.”
It is hoped that the reinstated lower price movement would be a turning point in the series of events that has happened in the market in the past months.

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This entry was posted on Saturday, November 1st, 2008 at 1:58 pm and is filed under Stock Market News. You can follow any responses to this entry through the RSS 2.0 feed. Tags: Nigerian Stock exchange
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