The long-awaited opportunity to buy into one of Africa’s most profitable company materialised as MTN Nigeria listed it’s shares on the Nigerian Stock Exchange (NSE) last week.
Investors in anticipation had placed offers with their brokers to get the stock, but three days following the listing, concerns are being raised over why brokers are unable to brokerage satisfactory deals or any deals for their investors.
But according to the NSE’s rulebook, when a dealing member or authorized clerk has an order to buy and an order to sell the same security at the same price, the dealing member or authorized clerk may “cross” those orders at a price at or within the NSE’s best bid or offer.
The NSE also described a variant of the above situation as the negotiated deal, which describes a situation where a cross deal is executed between two dealing member firms at a price which may be within the NSE’s best bid or offer or with the approval of The Exchange, outside the best bid or offer.
“Because cross deals involve clients of the same dealing member firm on both sides of a trade, significant issues have been raised that dealing members who have not been involved in the cross deals have been unable to trade on behalf of their clients,” the NSE explained.
It noted that it is however not unconcerned about this state of affairs.
The NSE said its council members have urged brokers to discuss with their clients about possible sales of shares.
“As an Exchange that champions transparency and equity for all stakeholders in our market, we have received stakeholder feedback concerning our present rules on cross dealing and will consider the issues raised as part of our sustained efforts to ensure our market remains equitable for all stakeholders.
We believe in market forces as the most efficient methodology for price discovery.
Demand and supply will interact to discover appropriate prices as trading activities continue in the market,” said the NSE.