Nigerian financial markets came into their own during the recent coronavirus lockdown as stocks, bonds, and other financial assets continued to trade despite the closure of physical offices of most brokers, market makers and market participants.
Top on the list of financial market Self-regulatory organisation or SRO to be applauded, is the premier exchange in the country, the Nigerian Stock Exchange (NSE), which continued to provide a platform for buyers and sellers to meet and trade, despite physical restrictions.
The Federal Government of Nigeria (FGN) had announced restriction of all movements in Lagos and Ogun States as well as the Federal Capital Territory, Abuja (FCT) for an initial period of 14 days effective 11:00 pm on March 30, 2020 to stem the spread of Coronavirus (COVID-19) in Nigeria.
This was extended by another 21 days to total 5 weeks of lockdown.
Earlier, the Lagos State Government had imposed a seven-day ‘slow down’ of non-essential services in the State, effective Thursday, March 26, 2020.
Lagos being the financial hub of the country, it would have been disastrous if there were no means for the N26 trillion worth of equity and bonds listed on the NSE to be traded.
The NSE was very supportive of the steps taken by the Federal and Lagos State Government aimed at flattening the rising curve of COVID-19 cases in Nigeria.
Since the outbreak of the pandemic, financial markets, particularly the capital markets around the world have seen elevated levels of volatility comparable to the global financial crisis of 2007/2008.
In Nigeria while stocks initially fell, they have quickly rallied to reverse most of the losses sustained during the lockdown.
More importantly to maintain the integrity of the nation’s capital market to continue to stimulate economic growth, the Nigerian Stock Exchange (NSE) activated its business continuity plan on March 23, 2020.
Through the activation, the NSE was able to achieve: continued trading during normal hours and days by providing remote trading access for Dealing Member Firms through FIX Protocol and Virtual Private Network (VPN) platforms.
It also commenced remote working for its non-essential staff nationwide; and closed its trading floors nationwide.
The NSE maintained continuous flow of relevant market information to enable stakeholders make informed investment decisions; and engaged with Government to address market issues raised by COVID-19.
The ability of the Nigerian financial and money markets to continue to operate during this crisis is testament to a well-functioning economy, and the robust processes and technology put in place by the NSE and its leadership team.
Even as the Honourable Minister of Finance, Budget and National Planning, Zainab Ahmed and the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele received presidential approval to include the Financial System and Money Markets in the list of exempted services from the lockdown of Lagos and Ogun States and the FCT, the NSE out of an abundance of caution and given its robust technology continued to sustain its remote trading activities at normal hours and days, in line with the guidance provided by the World Federation of Exchanges.
To comply with Government directives on the lockdown, the NSE activated the second phase of its business continuity plan that saw essential staff move into secured accommodation close to its offices with adequate arrangements for healthcare and other matters necessary to their wellbeing.
Access to the NSE offices was also restricted to these essential staff who ensured smooth remote trading and provided remote technical support to Dealing Members.
The NSE also continued to provide remote access to listed companies and issuers during this period.
The exchange took steps to engage with its numerous stakeholders that it is open for business remotely and for them to engage with the NSE via other digital channels such as X-Issuer, X-Boss, X-Whistle, the website and other digital and social platforms.
At other SROs such as the FMDQ, services remained uninterrupted as staff and systems were available remotely.
The FMDQ had a market turnover of N25.6 trillion or $69 billion for the month of March, with trading across a wide range of asset classes including Foreign Exchange, Foreign Exchange Derivatives, Treasury Bills, and Repo agreements.
The availability of secondary market trading during the lockdown period availed market participants (including the Federal Government) the necessary liquidity that has kept the Nigerian economy functioning.
For that they should all be applauded!
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