Nigerian Stock Exchange asks stockbrokers to recapitalize

The Nigerian Stock Exchange ( will suspend stock brokers that do not meet the capital adequacy requirements. The NSE interim administrator Emmanuel Ikazoboh said this during a press conference on 10 January in Lagos to review of market activities in 2010 and preview 2011.
Dealing members and stockbroking firms require a capital base of N1.5 billion (US$9.8 million), while issuing houses are required to have N5 bn. Recapitalisation was put on hold by the previous NSE management in 2009 after capital markets crashed in the first quarter of 2008. When the issue was raised a few years ago, complaining stockbrokers claimed the London Stock Exchange requires £1 mn ($1.6 mn) and the US requires only US$1 mn. At that time there were 246 registered Nigerian stockbrokers, dealing in only 213 equities listed on the NSE and since then the number of brokers has risen to 254. The recapitalization requirement may lead to consolidation.
Ikazoboh said stockbrokers are heavily exposed to margin loans and in some case have made losses and are in negative equity. He said the NSE wants to protect investors whose accounts were being used by some dealing member firms to continue to operate because they do not have enough money. Some stockbrokers have asked the NSE to save them with recapitalization, but he said this would not be possible.
The NSE is working with South Africa’s JSE Ltd ( to fulfil requirements to ratify its membership of the World Federation of Exchanges ( This is part of Nigeria’s plans to become the world’s 20th most developed economy by the year 2020. Challenges include improving the governance structure of the NSE and the wider market.


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