Economy
Firm Unveils Volatility Index for Nigerian Stock Market
By Quantitative Financial Analytics
Stock market volatility is one of those words that are being thrown around every now and then when describing stock market behaviours.
For example, on January 29, 2016, The Vanguard had an article entitled, “Stock Market Volatility – Operators Seek Govt Intervention Fund”, and On November 11, 2017, it also had another article, The ‘Big Oil’ and market volatilities”.
In the same way, ThisDay newspaper, on June 23, 2014 wrote “Stock Market Volatility Persists”. Even on LinkedIn pages, people write about market volatilities like the one written by Rotimi Fakayejo, MD Enterprise StockBrokers Plc on September 9, 2015, who posted the article “Gainers & Losers of the volatility of the Nigerian Bourse” on his LinkedIn page.
The Guardian on its business page wrote, “Equities rise on the Exchange amid volatility” on February 8, 2015.
Those are excellent articles both in content and intent although some made it look like market volatility is necessarily a bad thing. But one thing lacking in the articles is the quantification of how volatile the Nigerian market had been or was expected to be.
There have been various explanations for increased or subdued volatilities in the market as some of those articles opined. One reason is the arrival of new and unanticipated information that tends to or alters the expected return on a stock.
News items like the Brexit, the Chinese contagion, escalation of the US-North Korea impasse can have remarkable effects on market volatility. Changes in volatility can even emanate from changes in investors’ behaviours like when investors panic in anticipation of an election result or FED or Central bank decisions on interest rates, etc.
Volatility does not imply that the market is collapsing; rather, it implies that the market is behaving in such a way that it is more difficult to make accurate predictions about the market based on currently prevailing data and information.
Depending on one’s investment strategy and horizon and subject to the availability of tradable financial instruments, investors can manage and even profit from volatility.
In more advanced markets with tradable financial products like variance and volatility swaps, volatility may present opportunities for profit.
It follows therefore that knowledge of volatility of returns in stock markets’ behaviour is of paramount importance to investors because such knowledge helps investors to know or gain more information on the data generating such returns.
Knowing how volatile the stock market has been or is expected to be, guides investors in their decision-making process as such knowledge enables them to access both the return potential of the market as well as the uncertainty of such returns.
Volatility is the “magnitude of movements regardless of direction” and stock market volatility relates to the magnitude of price changes without paying attention to whether the change is up or down.
Stock market volatility is captured by two broad measures: implied and realized volatility. Realized volatility differs from implied volatility.
While implied volatility is a forward-looking measure, realized volatility is historical or backward looking.
Implied volatility answers the question, what is the expected volatility of the market in so and so time while realized volatility answers the question, what was or is the actual market volatility in so and so period.
While realized volatility is based on the actual movement of an underlying, implied volatility is based on a value derived from associated options prices. Realized volatility measures real risk while implied volatility measures anticipated risk.
Indices that measure volatility abound the world over especially in more advanced markets. The Chicago Board of Exchange (CBOE)’s VIX, otherwise called the fear gauge, measures implied volatility in the US market while India VIX is a volatility index based on the NIFTY Index Option prices in India and is meant to measure implied volatility in Indian stock market.
In the UK, implied volatility is measured with the FTSE IVI and is based on the index’s underlying option prices. In abundance also are realized volatility measures in more advanced markets like those calculated by S&P Dow Jones.
Currently, there is no index that measures implied or realized volatilities of the Nigerian stock market. The absence of an implied volatility measure is understandable as such is derivable from options and options are non-existent in the Nigerian market.
Realized volatility on the other hand, is derivable from historical data. To fill this gap, analysts at Quantitative Financial Analytics have come up with a Realized Volatility Index for the Nigerian Market.
The index is a one-month look back volatility measure of the NSE All Share index, (hereinafter called the underlying index). It assumes a 21-day monthly trading period and multiplies the result by 100 to reflect the index as a percentage.
The index is calculated daily and for all the trading dates that its underlying index (ASI) is calculated. The index has been calculated from 1998 to present and gives a bird’s eye view of the most and least volatile periods of the Nigerian stock market.
Comparatively speaking, the S&P 500 1-month realized index as at November 22, 2017 was 5.85, down from 5.87 the previous day while the Quantitative Financial Analytics (QFA) Nigeria All Share Index realized volatility index for corresponding period was 6.45, down from 6.55 the previous day.
Now, it is easy to talk about market volatility in Nigeria with some specifics and ability to compare with other markets and periods, at least in realized terms.
Quantitative Financial Analytics continues to add value to the Nigerian market with its many analytics.
It will be recalled that not long above, it rolled out its Fixed Income Analytics Report, which is a report with robust data and information on sovereign and corporate bonds trading in the Nigerian market.
For more information on the index and other reports, please contact us at [email protected]
By Adedapo Adesanya
The domestic supply of Premium Motor Spirit (PMS), also known as petrol, from the Dangote Refinery increased by 64.4 percent in December 2025, contributing to an enhancement in Nigeria’s overall petrol availability.
This is according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in its December 2025 Factsheet Report released on Thursday.
The downstream regulatory agency revealed that the private refinery raised its domestic petrol supply from 19.47 million litres per day in November 2025 to an average of 32.012 million litres per day in December, as it quelled any probable fuel scarcity associated with the festive month.
The report attributed the improvement to more substantial capacity utilisation at the Lagos-based oil facility, which reached a peak of 71 per cent in December.
The increased output from Dangote Refinery contributed to a rise in Nigeria’s total daily domestic PMS supply to 74.2 million litres in December, up from 71.5 million litres per day recorded in November.
The authority also reported a sharp increase in petrol consumption, rising to 63.7 million litres per day in December 2025, up from 52.9 million litres per day in the previous month.
In contrast, the domestic supply of Automotive Gas Oil (AGO) known as diesel declined to 17.9 million litres per day in December from 20.4 million litres per day in November, even as daily diesel consumption increased to 16.4 million litres per day from 15.4 million litres per day.
Liquefied Petroleum Gas (LPG) supply recorded modest growth during the period, rising to 5.2 metric tonnes per day in December from 5.0 metric tonnes per day in November.
Despite the gains recorded by Dangote Refinery and modular refineries, the NMDPRA disclosed that Nigeria’s four state-owned refineries recorded zero production in December.
It said the Port Harcourt Refinery remained shut down, though evacuation of diesel produced before May 24, 2025, averaged 0.247 million litres per day. The Warri and Kaduna refineries also remained shut down throughout the period.
On modular refineries, the report said Waltersmith Refinery (Train 2 with 5,000 barrels per day) completed pre-commissioning in December, with hydrocarbon introduction expected in January 2026. The refinery recorded an average capacity utilisation of 63.24 per cent and an average AGO supply of 0.051 million litres per day
Edo Refinery posted an average capacity utilisation of 85.43 per cent with AGO supply of 0.052 million litres per day, while Aradel recorded 53.89 per cent utilisation and supplied an average of 0.289 million litres per day of AGO.
Total AGO supply from the three modular refineries averaged 0.392 million litres per day, with other products including naphtha, heavy hydrocarbon kerosene (HHK), fuel oil, and marine diesel oil (MDO).
The report listed Nigeria’s 2025 daily consumption benchmarks as 50 million litres per day for petrol, 14 million litres per day for diesel, 3 million litres per day for aviation fuel (ATK), and 3,900 metric tonnes per day for cooking gas.
Actual daily truck-out consumption in December stood at 63.7 million litres per day for petrol, 16.4 million litres per day for diesel, 2.7 million litres per day for ATK and 4,380 metric tonnes per day for cooking gas.
By Adedapo Adesanya
The Securities and Exchange Commission (SEC) has introduced a comprehensive revision of minimum capital requirements for nearly all capital market operators, marking the most significant overhaul since 2015.
The changes, outlined in a circular issued on January 16, 2026, obtained from its website on Friday, replace the previous regime. Operators have been given until June 30, 2027, to comply.
The SEC stated that the reforms aim to strengthen market resilience, enhance investor protection, discourage undercapitalised operators, and align capital adequacy with the evolving risk profile of market activities.
According to the circular, “The revised framework applies to brokers, dealers, fund managers, issuing houses, fintech firms, digital asset operators, and market infrastructure providers.”
Some of the key highlights of the new reforms include increment of minimum capital for brokers from N200 million to N600 million while for dealers, it was raised to N1 billion from N100 million.
For broker-dealers, they are to get N2 billion instead of the previous N300 million, reflecting multi-role exposure across trading, execution, and margin lending.
The agency said fund and portfolio managers with assets above N20 billion must hold N5 billion, while mid-tier managers must maintain N2 billion with private equity and venture capital firms to have N500 million and N200 million, respectively.
There was also dynamic rule as firms managing assets above N100 billion must hold at least 10 per cent of assets under management as capital.
“Digital asset firms, previously in a regulatory grey area, are now fully covered: digital exchanges and custodians must maintain N2 billion each, while tokenisation platforms and intermediaries face thresholds of N500 million to N1 billion. Robo-advisers must hold N100 million.
“Other segments are also affected: issuing houses offering full underwriting services must hold N7 billion, advisory-only firms N2 billion, registrars N2.5 billion, trustees N2 billion, underwriters N5 billion, and individual investment advisers N10 million. Market infrastructure providers carry some of the highest obligations, with composite exchanges and central counterparties required to maintain N10 billion each, and clearinghouses N5 billion,” the SEC added.
By Aduragbemi Omiyale
The founder and chief executive of Austin Laz and Company Plc, Mr Asimonye Austin Lazarus Azubuike, has sold off about 52.24 million shares of the organisation.
The stocks were offloaded in 11 tranches at an average price of N4.36 per unit, amounting to about N227.8 million.
The transactions occurred between December 2025 and January 2026, according to a notice filed by the company to the Nigerian Exchange (NGX) Limited on Friday.
Business Post reports that Austin Laz is known for producing ice block machines, aluminium roofing, thermoplastics coolers, PVC windows and doors, ice cream machines, and disposable plates.
The firm evolved from refrigeration sales to diverse manufacturing since its incorporation in 1982 in Benin City, Edo State, though facing recent operational halts.
According to the statement signed by company secretary, Ifeanyi Offor & Associates, Mr Azubuike first sold 1.5 million units of the equities at N2.42, and then offloaded 2.4 million units at N2.65, and 2.0 million units at N2.65.
In another tranche, he sold another 2.0 million units at a unit price of N2.91, and then 5.0 million units at N3.52, as well as about 4.5 million at N3.87 per share.
It was further disclosed that the owner of the company also sold 9.0 million shares at N4.25, and offloaded another 368,411 units at N4.66, then in another transaction sold about 6.9 million units at N4.67.
In the last two transactions he carried out, Mr Azubuike first traded 10.0 million units equities at N5.13, with the last being 8.5 million stocks sold at N5.64 per unit.
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