The Nigerian Stock Exchange, NSE, will increase the circuit breaker,
the limit of movement any particular stock is supposed to record in a
any trading day, to attract price changes either upward or downward, to
10 per cent from five per cent limit, when the market makers resume
operations in the next three weeks.
Stock exchanges around the world introduce circuit breakers to
maintain sanity in the market and to ensure that a particular stock does
not go uncontrollably to one direction. Whenever the price of a stock
increases or declines beyond a specified threshold it is said to have
entered into a circuit. So, the circuit breaker is needed to halt the
unwarranted movement.
Mr. Adeolu Bajomo, Executive Director, Market Operations and
Information Technology, NSE, made the disclosure when he spoke at the
yearly Capital Market Conference, titled, “Liquidity & Deepening of
Nigerian Capital Market,” Thursday, in Lagos.
Bajomo explained that the change will apply to only stocks that are
being managed by market makers, adding, “at a later date, we will
consider whether to extend it to other stocks.”
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