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The Lagos (Nigerian) Stock Exchange (Reviewed, 10th May 2001) Tell your friends about this page! Email it to them.

Integrity      Trading      Pricing      All Share Index      Clearing and Settlement      Stock Market Legislations      Regulation Internationalisation       In the New Millennium      Listed Companies (separate page)   

Brief History: 

Before the establishment of the Lagos Stock Exchange in 1960, almost all formal savings and deposits went through the banking system while major capital balances were invested for the country by Britain on the London Stock Exchange. At present, there are 6 branches of the Exchange. Each branch has a trading floor.

Intl. Merchant Bank PLC, quoted on the Lagos Stock Exchange The Exchange started operations in 1961 with 19 securities listed for trading. Today, there are more than 260 securities listed on the Exchange. Most of the listed companies have foreign/multinational affiliations and represent a cross-section of the economy, ranging from agriculture through manufacturing to services. The branch in Lagos was opened in 1961 after the enactment of the Lagos Stock Exchange Act, 1961; Kaduna, 1978; Port Harcourt, 1980; Kano, 1989; Onitsha and Ibadan, 1990. Lagos is the head office of the Exchange. An office has also been opened in Abuja, the Capital of Nigeria. 


This is the watchword of the Lagos Stock Exchange. Market operators subscribe to the code "our word is our bond". Thus, public trust in the LSE has grown tremendously, with about 3 million individual investors and 100s of institutional investors (including foreigners who own about 47% of the quoted companies), using the facilities of the Exchange. The LSE’s history is devoid of any fraud, shocks, scandals or insider dealings.


The call over system was replaced in April, 1999 with the automated Trading System (ATS), with bids and offers now matched by stockbrokers on the trading floors of the Exchange through a network of computers. This occurs every business day from 11.00am till bids and offers have been executed (usually around 1.30pm).


Prices of new issues are determined by issuing houses/stockbrokers, while on the secondary market, prices are made by stockbrokers only. The market/quote prices, along with All-Share Index, are published daily in the Nose’s Daily Official List. The LSE's CAPNET (an internet facility), Newspapers, and on the stock market page of the Reuters Electronic Contributor System. The LSE's online code in the Reuters Network is NSXA-B. Pricing and other direct controls gave way to indirect measures by the regulatory authority, The Securities and Exchange Commission and the LSE, following the deregulation of the market in 1993. Deregulation has improved the competitive edge of the market and has also made it more investor-friendly. 

The All-Share Index:

The Exchange maintains an All-share Index formulated in January 1984. Only common stocks (ordinary shares) are included in the computation of the index. The index is value-relative and is computed daily. 

Clearing, Delivery and Settlement: 

Clearing, settlement and delivery of transactions on the LSE are done electronically by Central Securities Clearing System (CSCS), a subsidiary of the Stock Exchange. The CSCS Limited also referred to as the "clearing house" was incorporated in 1992 as part of the effort to make the Nigerian stock market more efficient and investor-friendly. Apart from clearing, settlement and delivery, the CSCS offers custodian services. 

Stock Market Legislations:

Transactions in the stock market are guided by the following legislations, among others:
  • Investments & Securities Decree No. 45, 1999.
  • Companies & Allied Matters Decree, 1990.
  • Nigerian Investment Promotion Commission Decree, 1995.
  • Foreign Exchange (Miscellaneous Provisions) Decree, 1995.


Transactions on the LSE are regulated by the Exchange itself, as a self-regulatory organisation and the Securities and Exchange Commission (SEC), which administers the Investments & Securities Decree, 1999.

Internationalisation of The Nigerian Stock Market: 

Following the deregulation of the capital market in 1993, the Federal Government in 1995 internationalised the capital market with the abolition of laws that constrained foreign participation in the Nigerian capital market. Due to the abrogation of the Exchange Control Act, 1962 and the Nigerian Enterprise Promotion Act, 1989, foreigners can now participate in the Nigerian market both as operators and investors. Also there are no limits anymore to the percentage of foreign holdings in any company registered in Nigeria.

Ahead of this development, the LSE had since June 2, 1987, linked up with the Reuters Electronic Contributor System for online global dissemination of stock market information like trading statistics, All-Share Index, company investment ratios, and company news (financial statements and corporate actions). In November 1996, the Exchange launched its Internet system (CAPNET) as one of the infrastructural support for meeting the challenges of internationalisation and achieving an enhanced service delivery. 

The internet system facilitates communication among local and international participants in the market, as subscribers to the system include stockbrokers, quoted companies, issuing houses, etc, who now use the facility to receive and send email, globally and locally. More importantly, they can access key market information – current and past trading statistics, corporate trading results, etc. 

The Nigerian Stock Exchange in this Millennium: 

In this millennium, the Nigerian Stock Exchange has a mission to promote increased capital formation in the country by providing issuers and investors with a responsive, fair and efficient stock market. Against this background, the NSE expects to realize the following key objectives:

  • Make the Nigerian Stock Exchange the preferred, efficient provider of long term capital to the Nigerian private and public sector.
  • Reduce the time cycle for raising fund on the market to between 1 and 2 months through effective underwriting of new issues.
  •  Pursue a systematic reduction in cost of transactions.
  • Operate a T + 3 computerised clearing and settlement system by 2001. (Please note: The LSE now operates a T+3 system - clearing is done in 3 working days)
  • Raise market capitalization to 90% of the gross domestic product (GDP).
  • Contribute 15% of the country’s foreign exchange receipts.
  • Increase the number of individual shareholders and encourage the entrance of more institutional investors – both local and foreign - for sustainable capital formation.

Email: [email protected]


Picture: IMB (Intl. Merchant Bank PLC) Plaza, Victoria Island 


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