BUSINESS Seplat listing forces NSE to change rule
Listing of Seplat Petroleum Development Company Plc has forced the Nigerian Stock Exchange (NSE) to change its current rule on pricing methodology to accommodate price stock above N100.00.
The NSE advised its stakeholders that there is a lacuna in its current rule on pricing methodology.
On Monday, Seplat was listed in the market as the first local oil firm with starting price of N576 per share.
According to a circular signed by Manager, Rules and Interpretation Department of NSE, Oluwatoyin Adenugba, “The relevant rule, Article 100, does not set forth a pricing methodology for determining the price movement where a new security is priced above N100.00 at the time of listing. In the circumstances, therefore, the Exchange has decided to take the most reasonable step in the interest of investors and the capital market.”
The decision of the Exchange is to treat the newly listed Seplat securities as “Group B” securities.
As a “Group B” security, a trade of 10,000 units will lead to a change in the published price of Seplat, NSE said.
To provide for similar instances in the future, the Exchange shall seek amendment to the Article 100 of the rules and regulations governing dealing members.
Concerning the price movements and price limits, the NSE said “for purposes of calculating price movements and price limits, equity securities traded on the Exchange shall be classified as group A which shall consist of equities with a primary market maker that are not classified in group B; and group B shall consist of equities with a primary market maker, that are priced above N100.00 per share for at least four of the last six months; or new security listings that are priced above N100.00 at the time of listing on the Exchange.”