Some market operators have called on the regulators of the nation’s bourse to expedite action in their efforts to appoint market makers as further delay might negatively affect the much awaited rebound of the equity market.
A market maker is a dealing firm which maintains bid and offer prices on a given security by standing ready to buy or sell that security.
All over the world, market makers play a very important role in both the equity and bond markets. They stabilise the market by standing ready to intervene at moments of scarcity or excess supply of securities.
The NSE had last year embarked on the plan of appointing active market makers as one of the major strategies aimed at increasing investors’ confidence, deepen the market and address lack of liquidity in the market.
Speaking on the issue, the National Coordinator of the Independent Shareholders Association (ISAN), Mr. Sunny Nwosu said that market makers had lost ‘their salt in the market.’
Nwosu noted that the long delay in the appointment of market makers would only create opportunities for selected brokers to profiteer.
The ISAN Boss? who described the policy as a miscalculated priority, enjoined? market regulators to concentrate more on re-building investor confidence.
‘What is more important is confidence among investors to ensure active participation, instead of depending on market makers to rebound the market,’ Nwosu said. He accused SEC and the Nigerian Stock Exchange of not doing enough to reduce the losses incurred by investors.
The former president of Association of Issuing Houses of Nigeria (ASHON) and the Chief Executive Officer, Trust Yields Securities Limited, Alhaji Rasheed Yussuf said that market makers alone would not bring succour to the depleted fortunes in the market.
Yussuf noted that what the market needed now was the Federal Government’s forbearance.
However, strong indications emerged recently that the Nigerian Stock Exchange (NSE) would soon give licences to 10 of its dealing firms to act as market makers as part of efforts to improve liquidity in the market.
According to reports, the indication came during a meeting of the Chief Executive Officer of NSE, Mr. Oscar Onyema, with chief executive officers of dealing member firms of the Exchange.
It was gathered that series of meetings have been going on between the Exchange and the operators who applied to be market makers.
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