The Nigerian Exchange Limited has revised its pricing methodology for listed equities, introducing a graduated three-tier volume system that requires different minimum quantities of shares to be traded before a price movement can be recorded, effectively returning the market to a structure similar to the 2018 microstructure rules that preceded the uniform 100,000-unit threshold that the bourse subsequently adopted.
Under the new framework, equities trading at N1,000 per share and above will require a minimum of 10,000 units to change their published price. Stocks priced between N500 and N1,000 will require 50,000 units before a price movement triggers, while shares priced below N500 will continue to require 100,000 units. The effective date for the change had not been communicated at the time of the announcement.
Market participants said the revision was designed to improve price stability and reduce the distorting effect of low-volume transactions on share valuations, particularly in highly priced equities where relatively small trades had sometimes produced price movements disproportionate to actual market activity. However, some traders expressed concern that the thresholds could reduce price responsiveness in less liquid stocks where trading volumes were already thin.
Globalview Capital Managing Director Aruna Kebira said the framework reflected a return to a system operators were already familiar with, and that the market had evolved substantially since the earlier rules were changed, with several companies now trading at valuations and market capitalization levels that were uncommon a decade ago. He said applying the same volume threshold across all price categories had ceased to reflect current market realities, making the tiered approach more appropriate for the exchange’s current composition.
