NGX and Stanbic IBTC Push Market Making for Liquidity

In Short

• NGX and Stanbic IBTC Stockbrokers are urging more participation in market making and securities lending.
• They say these tools can deepen liquidity in Nigeria’s equities market.
• The call was made during a webinar on unlocking equities-market liquidity.

What Happened

NGX and Stanbic IBTC Stockbrokers have called for wider adoption of market making and securities lending to improve trading conditions in Nigeria’s equities market.

Market making is when approved firms quote both buy and sell prices for a stock, so investors can trade faster without waiting for a matching order. It is like having a continuous “buyer and seller” in the market.

Securities lending is when an investor temporarily lends shares to another party, usually for a fee, with the shares returned later. This often supports short selling and settlement needs, and it can increase trading activity without changing the number of shares a company has issued.

The message was delivered at a webinar focused on unlocking equities-market liquidity. Liquidity means how easily investors can buy or sell shares at a fair price, without moving the price too much.

Why It Matters

Higher liquidity can make the Nigerian stock market more attractive to both local and foreign investors. It can reduce price swings, tighten bid-ask spreads (the gap between buy and sell prices), and make it easier for large investors to enter or exit positions.

For brokers, asset managers, and trading platforms, deeper liquidity can lead to more consistent volumes and better execution quality, which is the ability to fill trades close to the expected price.

For listed companies and firms considering IPOs, a more liquid market can improve price discovery, meaning prices reflect real supply and demand more accurately.

The push also signals that market operators want more participation from professional liquidity providers, and stronger frameworks that make lending and borrowing shares practical at scale.