BrokerDealer.com blog update courtesy of extracts from ThisDayLive.com
Often referred to as alternative trading system, electronic communication network has revolutionised trading on stock exchanges around the world. Despite initial apathy, dealing member firms of the Nigerian Stock Exchange are now embracing remote trading in a bid to woo retail investors writes, Eromosele Abiodun.
Following the introduction of technology, stock markets around the world have grown in leaps and bounds. The Nigerian stock market is a special example of the extent institutions can go if the right steps are taken in the right direction.
The impact of technology on the Nigeria stock market has been phenomenal, indicating the extent institutions can go when the right tools are employed. Technology indeed has taken control of the guts of business and made it possible for tiny, agile companies and stockbroking firms to become contenders.
In a bid to take the local bourse to the next level, the Nigerian Stock Exchange (NSE) had in 2005, introduced remote trading or Electronic Communications Networks (ECN), a system that enable brokers to trade in the comfort of their offices without having to come to its trading floor in Marina.
As you would expect, most stockbroking firms for some reasons (mainly financial reasons) failed to embrace the system, preferring rather to come to the NSE trading floor in Lagos.
Irked by their lukewarm attitude to its effort, the NSE did issue a statement calling on stockbroking firms to embrace remote trading and enjoy the many benefits instead of coming physically to the trading floors on a daily basis.
The NSE’s Deputy General Manager/Acting Head, Market Operations and IT Directorate, Mr. Ogbonnanya Osita, had at that time disclosed that there were already 235 remote trading connections in Lagos besides those deployed in branches across the country.
According to him, the remote trading system enables stockbrokers to trade from their offices without having to come to the floor of the exchange in person, adding however, that stockbroking firms are connected based on request.
Osita had noted that the number of dealing member firms that are using the system is growing rapidly, explaining that most of those stockbrokers who are still coming physically to trade are doing so because of the need to keep relationships with their colleagues.
While the attitude of a few elicited the exchange’s call for change of behaviour, some stockbrokers described remote trading as one of the commendable innovations in recent times.
For instance, the Chief Executive Officer (CEO) of Stanbic IBTC Stockbrokers Limited, Mr. Akeem Oyewole, had told THISDAY that remote trading has helped the growth of the market greatly and has improved the performance of his company.
“We have 10 stockbrokers in our company and it is only one of them who goes to The Exchange’s trading floor to trade physically. The remaining nine trade remotely from our office. It is working fine, it has been a blessing to our operations,” he said.
Also, the Chief Executive Officer of APT Securities and Funds Limited, Mallam Kasimu Kurfi, had told THISDAY that his company was the first to start remote trading at the NSE.
“We have been using it since inception and we have never encountered any serious problem.”