LAGOS—The Nigerian Exchange Limited has implemented a tiered price-movement framework, ending the uniform 100,000-unit trade threshold to boost market liquidity and ensure realistic price discovery across different stock categories.
Under the Securities and Exchange Commission’s approved rules, trades falling below new asset-class minimums will execute normally between buyers and sellers but will fail to trigger any official stock price movement.
High-priced equities trading at N1,000 or above, classified as Group A, now require a significantly lower minimum volume of 10,000 shares to shift their market prices.
Medium-priced stocks trading between N500 and N1,000 under Group B now need at least 50,000 units, while low-priced equities below N500 retain the baseline 100,000-unit volume requirement.
The intervention addresses severe liquidity blockages in premium large-cap equities, where the previous rigid 100,000-share rule made it expensive and difficult for high-value stocks to reflect true market demand.
Market analysts note that while the old uniform system protected the exchange from manipulation by small retail trades, it choked price responsiveness for institutional investors handling heavyweight equities.
The new framework drastically lowers the financial barrier for price discovery on premium boards, requiring far less capital to influence valuations of the market’s most expensive corporations.
The Automated Trading System now filters out sub-threshold transactions automatically, isolating them as minor retail exchanges that leave the daily closing ticker and official market capitalization completely unchanged.
