Economy
Stock Market: New Pricing Rule Favours Domestic Investors—Experts
By Dipo Olowookere
The recently introduced pricing methodology by the Nigerian Stock Exchange (NSE) has been described by experts as a tool that has favoured domestic investors by increased their participation in the stock market.
According to the Head of Banking and Finance Department at the Nasarawa State University Keffi, Dr Uche Uwaleke, has given local investors the opportunity to be more involved in the capital market because they can now pull volume with penny stocks trading below the former 50 kobo per share threshold.
“Unlike foreign investors who show more interest in high-cap stocks, a good number of domestic investors take positions in penny stocks given their affordability,” Mr Uwaleke told the News Agency of Nigeria (NAN) n Lagos.
The university don was reacting to the price depreciation posted by many penny stocks last month which had Consolidated Hallmark emerging the worst performing stock in percentage terms.
The stock opened trading in February at 50k, but lost 48 percent to close for the month at 26k per share, due to exchange new pricing method.
Mr Uwaleke said the new pricing methodology led to losses posted by most penny stocks.
“It is the new pricing methodology that has injected liquidity into those penny stocks which allowed their prices to fall below 50k,” he said.
The lecturer further said the new method was aimed at improving liquidity, narrowing spreads and ensuring that all price-improving transactions had impact.
He said that the new rule would effectively remove the previous rule which placed minimum allowable price for any stock to trade at its nominal value, irrespective of the market forces.
According to him, it specifies that stock prices will be determined by market forces of demand and supply, as prices can fall below the initial price.
On his part, Mr Ambrose Omordion, the Chief Operating Officer of InvestData Ltd, also attributed the development to the new pricing rule.
Omordion added that the losses posted by some second tier banking stocks were due to profit-taking following rally posted at the beginning of the year.
Data obtained from the NSE showed that Unic Diversified Holdings, another penny stock, came second last month after dropping by 47.83 percent to close at 24k per share against opening price of 46k.
Courtville Business Solutions dipped 46 percent to close at 27k against 50k, while Multiverse Resources lost 37.5 percent to close the month at 30k per share compared with the opening price of 48k.
Other top losers were Skye Bank, which dipped by 34.01 percent to close at 97k against N1.47k in January, while Wema Bank lost 32.65 percent, having closed at 99k in contrast with N1.47k.
Diamond Bank dropped 26.10 percent to close at N2.35k against N3.18k, while Unitykap lost 26 percent to close at 37k against the opening price of 50k.
Lasaco Insurance declined by 21.43 percent to close at 33k against 43k in January, while Royal Exchange lost 21.43 percent to close at 33k per share against 42k opening price.
Conversely, Linkage Assurance was the best performing stock in percentage terms, appreciating by 24.64 percent to close at 86k per share against the opening price of 69k.
Unity Bank trailed with a growth of 17.11 percent to close at N1.78k in contrast with N1.52k in January, while NEM Insurance rose by 16.02 percent to close at N2.10k per share against N1.81k.
Other top gainers were Beta Glass, 15.64 percent; Unilever,15.06 percent; CCNN, 11.27 percent; Transnation Express, 11.11 percent; Prestige Assurance, 10.87 percent; GSK, 10.53 percent; and AIICO Insurance, 10.29 percent.
During the month, the NSE All-Share Index lost 1,013.11 points or 2.28 percent to close at 43,330.54 against 44,343.65 achieved in January.
Also, the market capitalisation which opened at N15.895 trillion shed N146 billion or 2.18 percent to close the month at N15.549 trillion.
The volume of shares traded dipped by 44.96 percent as investors bought and sold 11.95 billion shares worth N106. 08 billion achieved in 112,255 deals.
This was in contrast with January turnover of 21.71 billion shares valued at N197.22 billion traded in 168.649 deals.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited tumbled by 1.12 per cent on Wednesday as a result of selling pressure in three of the five key sectors of the bourse.
Yesterday, the insurance space rose by 0.71 per cent and the energy counter appreciated by 0.02 per cent. But these gains were erased by the three other sectors, with the consumer goods index down by 4.93 per cent, the industrial goods sector down by 0.42 per cent, and the banking segment down by 0.30 per cent.
Consequently, the All-Share Index (ASI) receded by 2,756.48 points to 243,967.09 points from 246,723.57 points, and the market capitalisation dropped by N1.762 trillion to close at N157.494 trillion compared with Tuesday’s N159.256 trillion.
The worst-performing stock for the day was BUA Foods, which lost 10.00 per cent to trade at N760.60. Unilever Nigeria shed 9.97 per cent to close at N131.40, John Holt depreciated by 9.90 per cent to N9.10, AVA Capital declined by 9.50 per cent to N8.10, and Austin Laz crashed by 8.81 per cent to N2.90.
The best-performing stock for the session was International Energy Insurance, which chalked up 10.00 per cent to quote at N4.40. Ecobank gained 9.93 per cent to settle at N71.40, Trans-Nationwide Express expanded by 9.77 per cent to N2.36, CWG grew by 9.74 per cent to N21.40, and Cornerstone Insurance improved by 6.80 per cent to N5.50.
Yesterday, 1.5 billion shares were sold for N20.9 billion in 39,085 deals compared with the 3.9 billion shares worth N32.4 billion exchanged in 45,608 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 61.54 per cent, 35.49 per cent, and 14.30 per cent, respectively.
On top of the activity chart was Fortis Global Insurance, with a turnover of 853.2 million units sold for N2.6 billion. Universal Insurance exchanged 251.8 million units worth N214.1 million, Chams transacted 40.0 million units valued at N181.0 million, First Holdco traded 28.3 million units worth N3.9 billion, and Access Holdings sold 25.4 million units valued at N702.4 million.
By Aduragbemi Omiyale
As part of the implementation of the T+1 settlement cycle in the Nigerian capital market, the Securities and Exchange Commission (SEC) has fixed 5:00 pm on the first business day after a transaction (T+1) as the settlement deadline for equities and commodities traded and settled through the Central Securities Clearing System (CSCS).
In a circular on Wednesday to capital market operators and other market participants, the capital market regulator noted that all transactions in the affected securities must be fully paid by 5:00 pm T+1 to ensure compliance with the standard Delivery versus Payment (DvP) settlement procedure.
It warned that where a broker/dealer’s trading account is not adequately funded to meet its settlement obligation within the prescribed period, the default would be managed in line with the CSCS Default Management Procedure and the applicable transaction settlement guidelines of the relevant exchange.
The commission also clarified that foreign portfolio investors are not required to prefund their accounts for trades in the Nigerian capital market.
However, it said capital market operators facilitating transactions on behalf of foreign portfolio investors must establish and maintain appropriate controls and processes to ensure timely funding and completion of settlements within the prescribed timeframe.
The clarification follows earlier SEC circulars on the implementation of the T+2 settlement cycle for equities transactions, issued on June 3, 2025, and the transition to the T+1 settlement cycle, issued on May 15, 2026.
The T+1 cycle means that eligible securities transactions are settled one business day after the trade date, reducing the period between execution and final settlement.
The SEC said the transition represents a significant milestone in its efforts to build a more efficient, resilient and internationally aligned trading and post-trade environment, adding that the shorter settlement cycle would improve settlement efficiency, reduce counterparty risk, enhance liquidity and strengthen the competitiveness of the Nigerian capital market.
According to the agency, the reforms would ultimately improve the attractiveness of the Nigerian market to both domestic and international investors.
By Adedapo Adesanya
Oil prices slightly rose on Wednesday as attacks on ships in the Middle East continued and talks to end the Iran war hit an impasse.
Brent futures gained 7 cents to trade at $88.98 a barrel, while the US West Texas Intermediate (WTI) crude increased by 7 cents to $83.27 per barrel.
The US and Yemen’s Iran-aligned Houthis reported separate attacks on shipping in the Strait of Hormuz and the Bab el-Mandeb Strait on Tuesday, two crucial export routes for Middle Eastern oil and gas in addition to the Suez Canal.
Reuters reported that there continued to be no discussions between Iran and the US to extend their ceasefire because, from Iran’s perspective, the deal had no start date and so there was nothing to extend.
Shipping data showed the number of vessels transiting the Strait of Hormuz fell to a one-week low of eight on Tuesday. Before the war, 125 to 140 vessels passed through the crucial waterway each day.
The US military, meanwhile, said an American Navy MH-60 helicopter fired two Hellfire missiles to disable the steering gear of a Panama-flagged cargo ship.
The ship ignored repeated warnings to stop violating a naval blockade on Iranian ports, the US Central Command said.
Forecasters including the Organisation of the Petroleum Exporting Countries (OPEC) and the International Energy Administration (IEA) revised down their oil demand outlooks as US-Iran talks stall.
OPEC lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day, it said in its monthly oil market report.
The International Energy Agency cut its 2026 demand projections and now expects a 1.6 million barrels per day contraction this year. However, the Paris-based agency is also predicting a 4.3 million barrels per day drop in supply this year, and an overall 2026 deficit of around 1.27 million barrels per day.
According to the IEA, Middle East oil flows briefly returned to pre-war levels in early July, with loadings reaching 20 million bpd, before falling to 12 million bpd later in the month. Middle East production remained 8.3 million barrels per day below pre-war levels in July.
The IEA cited the Hormuz shutdown, the US blockade of Iranian exports, attacks in the Bab el-Mandeb Strait and reduced Kazakh CPC Blend exports among the forces keeping global supply below demand.
