The Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyema, has expressed dissatisfaction over what he described as liquidity constraints, even as the initial public offering activity has remained inactive throughout the year 2017.
He said that the decision to tackle liquidity constraints and to ensure a sustained flow of funds in the capital market, resulted to part of the measures to effect changes in the Market Making structure in 2018.
The NSE boss, who registered his dissatisfaction with the level of participation in the Market Making initiative over the years, explained that the exchange has commenced engagements with market participants to ensure that the restructuring exercise takes effect in the shortest possible time.
Market making involves entering bids and offer prices in the automated trading system for securities specified by the NSE as available for market making under its stipulated conditions. Market makers profit by charging higher offer prices than the bid prices.
He explained that the primary role of a Market Maker is to maintain a fair and orderly market in its particular securities and to contribute to the operations of the market by ensuring that buyers and sellers of securities could transact.
He said, “We are not satisfied with their rate of participation and how they catalyse growth in the market, especially when we really needed them to participate in the commodity
down cycle.
“We are looking at it critically and we have engaged with the market makers and other market participants and in 2018 you will see a significant change in the structure of market making and its rules.”
According to him, the initial public offering activity in 2017 was mute, adding that there were several other positive indicators including the revival of supplementary listings and the return of new issuances. The value of supplementary listings increased by 27 per cent, bringing the total value of equity issues in 2017 to N408 billion.
