Four Stocks Closed Below Previous Floor Price As New Par Value Rule Takes Effect

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Monday, January 29, 2018  / 04:43PM  / Proshare Research

Today, the Nigerian Stock Exchange (NSE) amended par value and pricing methodology rules which can be found in Rules 15.29 and 15.30 respectively of the Rulebook of The Exchange, 2015 and approved by the Securities and Exchange Commission (SEC) became effective.

The Rules, as stated, stipulate the revised price limit, price movements and tick sizes i.e. price floor, minimum pricing increments and minimum quantity to be traded that will change the published price. The Rules also classify equity securities into different price groups in order to achieve this objective.


Table 1 :
The new price groups, price limits, tick sizes, and minimum trades’ quantity required to change prices for equity securities traded on The Exchange

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Source: NSE 

In a nutshell, market stakeholders and participants are made to realise that the new Par Value Rule specifies that the price of every share listed on The Exchange shall be determined by the market forces and equities may now trade below the previous price floor of fifty Kobo (N0.50) per unit which used to be the norm.
 

Traders in the market are required to ensure that as from today, all open and subsequent priced orders in equity securities comply with the amended requirements for each price Group of equities.
 

At the end of today’s trading activities, four (4) stocks closed below the previous floor prices of 50k. The affected stocks
ABCTRANS, LASACO, PRESTIGE and ROYALEX closed at 48k
 

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Table 2:
Today’s Price Performance of the Four (4) Stocks That Closed Below Previous Floor Price

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A breakdown of the volume traded by each of the four (4) affected stocks against the market volume traded at the end of today’s trading activities reflected that ROYALEX recorded the highest percentage of volume traded versus total market volume with 1.03% recorded while ABCTRANS, LASACO, and PRESTIGE recorded 0.02% each.

 
Table 3: Percentage (%) of Volume Traded vs. Total Market Volume

Ticker

Volume

Market Volume

% Chg

ABCTRANS

      101,000

          573,349,748

0.02%

LASACO

     120,000

          573,349,748

0.02%

PRESTIGE

     108,000

          573,349,748

0.02%

ROYALEX

  5,910,259

          573,349,748

1.03%

Source: NSE, Proshare Research

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