Trading on Nigeria’s stock exchange will stop for thirty minutes from today if the All share indix moves five per cent from Friday’s close in a move to check the slide in stock prices.
The Exchange introduced the circuit breaker to limit price swings as equities in Africa’s biggest oil producer plunged the second-most among global stock markets last week.
According to the new regulation, trading on the Nigerian Stock Exchange will be stopped for 30 minutes if the All Share Index moves 5 percent from the previous day’s close between 10:15 a.m. and 1:45 p.m., the Lagos-based bourse said in a statement on its website.
The market will close for the day if the circuit breaker is triggered for a second time or after 13:45 p.m.
The implementation of the rule, originally approved by Nigerian authorities in May 2014, came on Friday as the market experienced its sixth day of losses. The All Share Index fell 3 percent to 23,514.04 on Friday, extending its weekly decline to 13 percent, the most after Egypt’s among 93 primary indexes tracked by Bloomberg. The gauge is down 18 percent this year, the worst start since at least 1999, according to data compiled by Bloomberg.
“Investors are panicking with oil prices having dropped significantly in the past week,” Seun Olanipekun, an analyst at Investment One, said by phone from Lagos. “It’s the NSE trying to manage the market so that the All Share Index doesn’t significantly decline.”
China scrapped its controversial circuit-breaker system this month after finding that it spurred investors to rush for the exit on days of sharp declines.
Joseph Kadiri, spokesman for Nigeria’s stock exchange, wouldn’t provide further comment when contacted by phone.
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