RenCap launches services on Nigerian bourse

Renaissance Capital has launched its Market Making, Securities Lending and Short Selling services on the Nigerian Stock Exchange (NSE) for its clients.

This followed the formal commencement of a pilot programme for the services on the NSE on September 18, 2012.

A statement released in Accra on Tuesday said Renaissance Capital, the leading emerging markets investment bank and one of the 10 Primary Market Makers (PMM) appointed by the NSE,  would be responsible for creating an orderly market, and supporting enhanced liquidity on the exchange, although PMMs were not expected to act as liquidity providers of last resort.

NSE market makers are required to provide bid and offer quotes within the daily circuit-breaker limit for stocks in which they make a market.

The determination of spread and quote sizes will be at the sole discretion of the PMMs. The circuit breaker for stocks in which the PMMs will commence making markets during the pilot scheme is 10%, while that for other stocks remains at 5%.

The pilot scheme, initiated by NSE management, also permits PMMs to start with one or two securities of their choice from the basket allocated to them for the first six months of the new initiative (the pilot period).

They have the option to add more stocks from their baskets into the market-making programme over time. Once a stock is added, the circuit breaker automatically changes to 10%. The NSE will update the list with newly added stocks bi-weekly.

Yvonne Ike, Renaissance Capital CEO West Africa said, “This is yet another important milestone in the development of the Nigerian Stock Exchange, Renaissance Capital is delighted to bring its experience from other emerging markets to bear on this initiative, and we believe that this initiative will help to build a more buoyant and efficient stock market”.

She added that “the service will further drive interest from international investors to invest in Nigerian equities, and strengthen our commitment to attracting local investors to the Nigerian equities market.”

Renaissance Capital is the leading broker by market turnover on the NSE, with a 19% share as at August 31, 2012, and 21.5% for the month of August.

Source GNA

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