- NGX Regulation Limited issued a warning against speculative trading, urging investors to focus on fundamentals
- The advisory followed notable recent price movements in listed companies, including tier-one and tier-two banks
- NGX RegCo reassured the public that the Nigerian Exchange remains stable, well-regulated, and resilient
The independent regulatory arm of the Nigerian Exchange Group, NGX Regulation Limited (NGX RegCo), has issued a stern advisory to the investing public, warning against the perils of speculative trading and urging market participants to base investment decisions on company fundamentals rather than rumours or unverified information.
In a statement released on Wednesday in Lagos, NGX RegCo addressed recent notable price movements observed in the shares of certain listed companies over the past trading sessions. The advisory forms part of the regulator’s standard market surveillance efforts, designed to maintain a fair, orderly, and transparent market for all participants.
Speaking on the matter, the Chief Executive Officer of NGX Regulation Limited, Olufemi Shobanjo, said, “Our primary responsibility is to maintain a level playing field where market participants can trade with confidence, backed by timely and accurate information. This advisory is a routine communication, reinforcing that sound fundamentals, not speculation, remain the foundation for sustainable investment outcomes. We are fully committed to preserving the integrity and stability of our market.”
The regulator encouraged investors to adopt informed and disciplined decision-making by relying on publicly available data. This includes conducting thorough assessments of company fundamentals, financial performance, and risk profiles before making investment choices. NGX RegCo also urged investors to exercise due diligence and to avoid trading based on rumours or unverified tips. Where necessary, the regulator recommended seeking guidance from licensed intermediaries such as stockbrokers or investment advisers.
Despite recent volatility in certain stocks, NGX RegCo reassured the public that the broader market remains stable and resilient. “NGX RegCo reassures all stakeholders that the Nigerian Exchange remains stable, well-regulated, and resilient,” the statement read. “The Exchange continues to foster an environment where investors can participate with confidence, supported by robust oversight and transparent market operations.”
The advisory comes amid a significant surge in the share prices of tier-one and tier-two Nigerian banks. Analysts attribute the rally to year-end positioning, attractive valuations, and dividend expectations. NGX RegCo uses sophisticated technology to monitor trading patterns in real time. Price movements exceeding predefined thresholds, such as a 10% or 20% change without a corresponding corporate announcement, trigger alerts for further review.
By issuing this advisory, NGX RegCo seeks to remind investors to look beyond short-term price spikes and focus on the long-term value drivers of the companies in which they invest, underscoring the regulator’s commitment to a stable and transparent Nigerian capital market.