The Nigerian Exchange (NGX) postponed the scheduled August launch of its new pricing methodology as market participants called for more time to absorb the impact of recent reforms, particularly the transition to T+1 settlement cycle, while investors prepare for the Dangote Refinery’s planned N2.15 trillion initial public offering (IPO).
Nairametrics learnt that capital market operators said the number of reforms taking place simultaneously could complicate implementation and urged the Exchange to allow the market to absorb existing changes before introducing another operational adjustment.
According to market participants familiar with the matter, the Securities and Exchange Commission (SEC) also directed the NGX to undertake wider stakeholder consultations for about three months before proceeding.
When contacted, NGX Head of Corporate Communications Clifford Akpolo said: “There’s no comment on that for now,” promising to revert to Nairametrics.
The proposed NGX’s new pricing methodology is designed to address a structural liquidity and price-discovery challenge created by highly priced equities.
As prices of some stocks rise substantially, however, the naira value required to generate even a small price movement became increasingly large.
David Adonri, Chief Executive Officer of Highcap Securities Limited, said the old methodology was appropriate previously but is no longer adequate for highly priced stocks.
Adonri said the strongest argument against the immediate launch was sequencing, particularly the need to allow investors to adjust to T+1.
Charles Fakrogha, Chief Executive Officer of ECL Asset Management Limited, similarly pointed to the volume of reforms confronting the market.
The concern has gained another dimension with the Dangote Refinery IPO scheduled to open on September 14.
Abiodun Ogunniyi, Head of Research at GTI Securities Limited, said the market does not need the pricing change immediately, given the scale of activity surrounding the refinery offer.
He suggested that the methodology could instead be considered toward the end of the year or in January 2027.
Ogunniyi also raised a potential volatility concern around the expected return of foreign portfolio inflows.
He noted that lowering the quantity required to move large-cap stocks could amplify price swings when substantial foreign capital begins entering the market.
Aruna Kebira, Chief Executive Officer of Globalview Capital Limited, offered a more direct explanation for why the timing could be sensitive. He argued that requiring only 10,000 shares to move the prices of highly valued stocks such as Aradel Holdings, Seplat Energy and Dangote Cement could magnify both upward and downward movements.
These earlier experiences remain relevant as the market weighs whether differentiated thresholds can improve liquidity without encouraging excessive price swings.
When the previous methodology was withdrawn, the then NSE Chief Executive Officer, Oscar Onyema, said the change was intended to ensure that price-improving transactions were material enough to make the market more efficient and attractive.
The timing remains uncertain. Adonri said the methodology may not be implemented this year but would eventually be introduced because it represents a major market-microstructure reform.
Another market operator said wider consultation was necessary because the reform could affect companies positively or negatively.
The postponement comes amid a broader wave of reforms reshaping Nigeria’s capital market, including the June 1 transition to T+1 settlement, just as NGX engaged global custodians and institutional investors over settlement-related concerns and prepares for the Dangote Refinery IPO.
The reform remains significant, but its eventual launch again will likely depend on whether stakeholders can reach sufficient consensus that the benefits of better price discovery outweigh the risks of sharper price swings.
