By Peter Egwuatu

SECURITIES dealers have expressed their readiness for the take-off of the demutualisation of the Nigerian Stock Exchange, NSE, stressing that it will give them multiple income streams and options to trade.

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The Nigerian capital market, in addition to the Nigerian Stock Exchange, NSE, also hosts the Over-The-Counter (OTC) Exchange with the emergence of NASD Plc and FMDQ which has become a full-fledged Exchange and the Lagos Commodities and Futures Exchange (LCFE) is expected to commence operations soon as a Pan African Exchange among others.

Speaking to Financial Vanguard on the take-off of demutualisation of the NSE, the Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Oyinyechukwu Ezeagu, who shared the views of the dealers, described the development as heart-warming, adding that multiple trading will bring multiple income streams to dealers table.

“The new trend in the financial market is that operators have multiple options for professional practice. These go along with multiple income streams on the table of market operators. We are looking at a broad range of markets and the readiness of operators to participate in these markets. We have seen an expansion in fixed income investments, in government securities and renewed interests in the commodities market. The listing of two telecommunications companies excited the market within the year.”

Ezeagu noted that equity prices had been going down all over the world becoming enigmatic for traders who could not keep up with continuous price volatility, especially, where other asset classes like fixed income, proved better alternatives.

Commenting on the implications, he said: “This has serious implications to the operators who hold equities as part of their capital; they have to contend with pressures from regulators to maintain the minimum regulatory capital requirement. On the part of investors, there is a renewal of the age-long attitude to buy and hold which also impacts on market liquidity. However, with the recent pronouncement by the Central Bank of Nigeria, equities market seems to have responded positively.”

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On the impending demutualization of the Nigerian Stock Exchange he said: “It had been in the works for a while and ASHON has been involved in the discussions. We represent firms that will transit from members to shareholders of the Exchange. We are gearing up to this new responsibility and the benefits we expect to flow from the laudable venture.”

Vanguard