E-Financial
NSE Unveils New Market Makers, Adjusts Circuit Breakers
Nigerian Stock Exchange (NSE) will this morning April 2, unveil supplementary market makers expected to complement the activities of primary market makers introduced in September, 2012.
Today also, the circuit breaker for all quoted stocks on the NSE would move 10 per cent upward to ensure liquidity in the capital market.
Circuit breaker is the percentage at which a price of any quoted company can move up or down on daily basis.
Ade Bajomo, executive director for Market Operations, had at press briefing recently said that th exchange would ensure there is no limit to the number of supplementary market markers, adding that whoever qualifies would be picked.
He said that the minimum requirement for each supplementary market maker would be N250, 000 and that the exchange had received 20 applications.
Bajomo also said that the NSE will as from April increase the maximum daily price limit to 10 per cent for all equities listed on the Nigerian bourse.
At present, about 52 stocks that are in the market making basket record daily price swing of 10 per cent, while others outside the basket record only five per cent.
Bajomo explained that all equities will record a maximum price movement of 10 per cent either up or down.
According to him, the decision to raise the price limit was informed from the feedback received in the six months of the market making programme, which he said would enter the second phase in April.
He disclosed that apart from adopting a new price limit, the NSE will also unveil supplementary market makers to complement the efforts of the 10 price market markers appointed last April to commence the programme last September.
The executive director said that the introduction of market marker initiative had increased the market liquidity and the number of retail participations.
Bajomo said that the NSE daily average volume transactions had increased from 17 million dollars in 2012 to 25 million dollars by March due to the market making initiative.
Before now, only market making stocks were allowed to move up to 10 per cent while others remained at five per cent during transactions.
The NSE introduced market makers in 2012 to settle buy order imbalances from customers through the provision of liquidity.
Market makers are rated according to the level of liquidity support they provide.
“When the market making programme started, we said the roll out for the first phase would be for six months. That we have completed and we moving to the second phase. By first week of April, we will announce supplementary market makers while the price limit would be increased for all stocks across board,” he said.
Explaining further, the Head Products Management, NSE, Dipo Omotoso, said 23 stockbroking firms applied to be appointed supplementary market makers.
According to him, each supplementary market maker is expected to have a net capital of N250 million as against the N500 million requirement for primary market maker.
“We received 23 applications and the successful ones would be announced after going through their compliance history and other required checks. Unlike the primary market makers, the supplementary market makers would enjoy 50 per cent NSE fee waiver compared with 100 per cent waiver enjoyed by primary market makers,” he said.
E-Financial
Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme
“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.
MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.
Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.
The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.
The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.
E-Financial
CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering
Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.
The inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.
In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN, disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.
“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.
The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.
However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.
Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.
Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.
E-Financial
CBN Urges Banks to Expedite Action on Recapitalisation
Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.
Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.
The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.
Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.
“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”
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