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NSE makes history as Yar’Adua inaugurates electronic trading floor

By Goddy Egene

History will be made on Friday (today) as the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria, Musa Yar’Adua, inaugurates the Nigerian Stock Exchange’s world class electronic/automated trading floor in Lagos.

Photo File onyuike

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The event would effectively reinforce the NSE’s full-blown automation of all its operations.

At inception in 1961, the Exchange commenced with manual trading system otherwise known as the Call-Over or Open Outcry. However, in pursuit of its strategic plan to automate all operational procedures, it transited to the Automated Trading System on April 27, 1999. The transition is in line with the requirement for members of the World Federation of Exchanges.

Apart from the ATS, the NSE also operates remote online/realtime trading as stockbrokers have an option of trading from their offices.

The Director-General of the Nigerian Stock Exchange, Prof. Ndi Okereke-Onyiuke, explained that new standard of the trading floor would enhance efficiency of transaction.

“Indeed, it is another opportunity to showcase the strength and competitiveness of the NSE and Nigeria’s economy in general. The opening ceremony is the outcome of a comprehensive upgrade of the trading floor in line with the global best practice,” she said.

The NSE boss explained that the inauguration ceremony would attract State Governors, top government functionaries, seasoned capital market regulators, operators and other stakeholders in the financial market.

An array of activities including documentary show and traditional dance would provide comic relief at the event. The ATS is worth celebrating given the fact that it boosted growth witnessed in the stock market.

Before the introduction of ATS in 1999, average daily equity transactions used to be about 37million shares worth N282m.

Currently, the average weekly equity turnover stands at 3.5billion shares worth over N30bn.

The NSE All-Share Index, which was a little above 5,000 in April 1999, closed at 51,147.37 on Thursday, while the market capitalisation, rose from N242bn to N8.347tn in the same period under consideration.

Speaking at the 46th Annual General Meeting as recently, the President of the NSE, Mr. Oba Otudeko, said that between January August 2007 alone, a total volume of 90.4billion shares worth N1.34tn were traded, compared with a N20.8bn shares valued at N273.2bn in the corresponding period of 2006, while turnover ratio in the market has rose from 14.7 per cent to 19.5 per cent.

He attributed the performance also to improved awareness of opportunities in the stock market; profit taking/loss cutting by investors and big ticket transactions in the banking and insurance sub-sectors; sustained inflow of funds from pension funds and low interest rate on deposits in the money market.

He said, “From all indications, the achievements so far in 2007 are only a tip of the iceberg when compared with the capabilities of the Nigerian stock market. Our performance goes to confirm the resilience of our market and the growth opportunities in it. In deed the outlook for the exchange is very bright.”

Otudeko assured all market stakeholders that the future of the market looked brighter.

According to him, for the rest of the year, active portfolio management, increased foreign participation, sustained inflows from pension funds and insurance companies are some of the forces that will drive the market to greater attainments.

He said that market infrastructure remained sound and capable of meeting the growing needs of investors, issuers and market operators.

“Additionally, new issuance of bond by the Federal Government would buoy activities in the primary market even as we expect some banks and manufacturing companies to seek funds from the stock market, adding to the mix of available instruments and further deepening the market,” he said.

Many corporate bodies are identifying with the inauguration of the ATS.

They include, First Bank of Nigeria Plc, First Registrars Limited, City Securities Limited, Spring Bank Plc, Goldman Assets Management Limited, Central Securities Clearing Systems Limited, Oceanic Bank International Plc, Dangote Sugar Refinery Plc, Interstate Securities Limited, Kakawa Discount House Limited and Japaul Oil and Maritime Services Plc.